Jack Straw: Probation funding has increased since 1997 by 70 per cent. in real terms, a faster rate than the increase in case load and almost twice the growth rate of the prison service. Staff numbers have increased by 50 per cent., with a 54 per cent. increase in front-line staff.
	The budget for this year is £894 million. Taking account of a £17 million underspend in 2008-09, the required efficiency savings will be less than half of 1 per cent. No final decisions have been made about the budgets for 2010-11.

Sandra Gidley: When confronted with the realities of probation overstretch in the case of Daniel Sonnex last week, the Minister claimed that there had been a net increase in the number of probation officers over the previous five years. Will he admit, however, that that figure relies largely on the massive increase in the numbers of probation service officers, who are qualified to a lesser degree and cannot supervise high-risk offenders? Will he confirm that the number of qualified probation officers actually fell over the same period?

William Cash: The Justice Secretary might know that there are proposals in relation to Staffordshire, some details of which we received as a result of a meeting today with senior management. In Staffordshire, we believe strongly in local identity and the local community, and we pay tribute to the probation service. Does the right hon. Gentleman accept that there are those of us who are seriously worried about the idea of being merged into a west midlands probation service? What is the rationale behind that, and will he review it?

Jack Straw: I gleaned from that that when the hon. Gentleman talks about bibs, he means high-visibility jackets for offenders. If he wants—there is now overwhelming evidence of this—greater public confidence in the less expensive and often more effective community punishments of unpaid work, he must support measures to increase public confidence in those disposals. One of the best means that we have used recently to increase public confidence in those disposals at very low cost has been the introduction of high-visibility jackets. It has worked.

Dari Taylor: Teesside probation services received significant increases in funding over the years, but I am receiving letters from trainee probation officers who tell me that their chief probation officer has stated that indicative budgets for 2010-13 indicate clearly that they will not be employed after March 2010. Does my right hon. Friend accept that the concern of the young women who have written to me makes it clear that they believe that grassroots officers are being penalised because there is a financial shortfall?

Nicholas Winterton: I fundamentally disagree with the Minister. The hon. Member for Birmingham, Yardley (John Hemming) is doing a great service to justice and the families whose children are unnecessarily, unjustly and wrongly taken away from them. I also have such cases, and have liaised with the hon. Gentleman on the subject. Will the Minister accept his request for a meeting so that the dossier that he, I and others have produced can be discussed with her? In that way, she will see the injustice, secrecy and behind-the-door dealing involved in the current situation.

Jim Cunningham: If he will take steps to increase staffing levels in HM Probation Service.

Claire Ward: I am sure that my hon. Friend will agree, as would many hon. Members, from across the House, that the most appropriate thing is to ensure that we have as few young people in custody as possible. The most appropriate thing is to try to treat those offenders in the community. That is why the number of places has been reduced—because the demand has been reduced, as we look at other alternatives and as we consider the issue that my hon. Friend has raised to ensure ensuring that younger people are moved to the most suitable places for their needs. That is what the Youth Justice Board will keep foremost in its mind when it assesses those young people.

Ben Bradshaw: With permission, Mr. Speaker, I shall make a statement on the publication of the "Digital Britain" report.
	Britain's digital industries are among the most successful in the world. The global technological revolution means that if we make the right decisions now, they will continue to grow and Britain will continue to prosper from them. The report, which is part of the Government's active industrial policy, spells out how we can make the most of the opportunities today and in the years to come.
	The report covers four broad themes. First, we will make the most of the digital revolution only if we have the right infrastructure. Just as bridges, roads and railways were the foundations of Britain's 19th-century industrial strength, our digital communications infrastructure will help power our future success. Businesses, other organisations and individuals want access to high-capability, high-speed networks, both fixed and mobile. This is key to Britain's competitiveness.
	As a first step, we are reaffirming our commitment to ensure universal access to today's broadband services, delivered through a public fund, including money that has not been used for digital television switchover. But we also need to ensure that Britain has the best next generation fixed broadband. Other countries are already investing heavily in this. Here, we have already seen an energetic market-led roll-out of next generation fixed broadband, but the economics of building what are essentially new networks mean that if it is left to the market, true super-fast broadband will reach only two thirds of homes and businesses over the next decade. The other third would be left behind.
	Telecommunications prices for the consumer have fallen significantly in recent years and are expected to fall further as technology advances, so we have concluded that the fairest and most efficient way of ensuring that people and businesses are not left out is to use some of that saving in the form of a small levy on all fixed lines to establish an independent national fund, which will be used to ensure maximum next generation broadband coverage.
	To complement improvements to fixed broadband, we also need to modernise our wireless network. This report sets out plans for the structured release of sufficient high-quality spectrum Europe-wide, for the creation of the next generation of mobile networks. This will ensure that the UK is among the earliest countries to deploy these networks and that UK consumers continue to enjoy the benefits of vigorous competition. Today's report also sets out our intention to upgrade all our national radio stations from analogue to digital by 2015, with DAB firmly placed as the primary platform.
	Having the right infrastructure will not, however, be enough unless everyone can use, and benefit from, the opportunities that new technologies offer, so participation is the second big theme in today's report. Technological progress reduces costs, so affordability is partly addressed by the market. However, we are complementing this with Government action. Our £300 million home access scheme gives children in low-income families access to computers and the internet. As well as the ability to afford the technology, people need capability and skills. We address these in a number of ways in this report. I am pleased to announce today the appointment of the digital entrepreneur Martha Lane Fox as our new digital inclusion champion. We are also publishing today the report by my noble Friend Baroness Morris of Yardley on digital life skills.
	The third key theme of "Digital Britain" is content—sustaining and strengthening our creative industries and securing plural provision of key public service content in the digital age. The ease with which digitised content can be copied makes it increasingly hard to convert creativity and rights into financial reward. The Government believe that taking someone else's property and passing it on to others without consent or payment is tantamount to theft. Developing legal download markets will best serve both consumers and the creative industries. We will also legislate to curb unlawful peer-to-peer file sharing. Ofcom will be given a new duty to reduce this practice significantly, including two specific obligations: the notification of unlawful activity and, for serial infringers, identity release to enable targeted legal action by rights holders. We also propose technical measures by internet service providers, such as bandwidth reduction for serial infringers, if the other measures prove insufficient.
	We will also implement a new, more robust system of content classification for the video games industry, building on the pan-European game information system with a strong UK-based statutory layer of regulation; that will ensure the protection of children, now and in the future.
	I now turn to the evolving role of the BBC and Channel 4, and the need to protect public service content, particularly in the nations and regions of our country. In the digital age, a strong, confident and independent BBC is more important than ever. The Government support multi-annual licence fee settlements for the BBC, so that it can plan ahead and act independently of day-to-day political pressures, but we also believe that it is in the BBC's own interests to evolve into more of a public service partner with other media organisations, and to see itself as an enabler of Digital Britain. We have been encouraging discussions about a joint venture between BBC Worldwide and Channel 4, which we believe would benefit both, as well as securing the future of Channel 4. Those talks are ongoing, and we are ready to help in any way we can.
	Members of this House have repeatedly said that they believe that strong local and regional news, including a plurality of provision, is essential for the health and vibrancy of our democracy—I agree. The recent public service review by the regulator, Ofcom, also highlighted the importance of news in the regions and nations. We welcomed its report and the BBC's response supporting partnerships. Partnerships are very welcome, but they may well be insufficient to meet the scale of the challenge. We believe that that will require a secure and sustainable funding stream.
	The licence fee is the existing major intervention for content. There is nothing in either the BBC charter or legislation to say the BBC must have exclusive rights to it. Independent of the level at which the licence fee is set after 2013, we will consult on the option of sharing a small element of it post-2013 to help ensure high-quality plural provision, particularly in the regions and the nations. Subject to that consultation, we will use some of the current digital switchover underspend to fund pilots of this model in Scotland, Wales and one English region between now and 2013. We have, however, made it clear to the BBC and others that we are open to alternative proposals, should they wish to make them during the consultation. Alongside "Digital Britain" we are publishing a range of related documents, including the outcome of the review by the Office of Fair Trading of the media merger regime and local and regional media.
	The fourth key theme in "Digital Britain" is the continued modernisation of government itself. The digital revolution has huge potential to improve the services of government and public bodies, and to reduce costs. It raises questions of data security and how government, as a major buyer in areas such as health and education, can encourage UK-based research and development, open standards and interoperability. The report sets out how public services will be delivered primarily online and electronically, thus making them quicker and more responsive to the public while saving money for the taxpayer.
	This report will help accelerate Britain's recovery from the biggest economic shock the world has seen since the second world war, and it is a central part of our industrial strategy. It will be key to our economic growth, social cohesion and well-being as a nation, and I commend it to the House.

Ben Bradshaw: I am glad that the hon. Gentleman mentioned the role that Lord Carter of Barnes has played in this report, because I omitted to thank and commend Lord Barnes on his excellent piece of work.
	Contrary to what the hon. Gentleman said, the report contains some 78 action points. In the main, we are consulting only on matters that require primary legislation, and I hope that hon. Members on all sides will think that that is generally good practice. However, we are consulting on one thing that does not require primary legislation, and that is the idea of sharing some of the BBC's licence fee. I acknowledge that we have decided to do that, because it is quite a big move of principle—but if the hon. Gentleman does not think that we need to consult on it, he can just send me a letter saying that he agrees with the proposal. That would be very helpful indeed.
	The hon. Gentleman implied that there was no need for public investment in the next generation of broadband roll-out. I appreciate that he has not had time to read all 250-odd pages of the report yet, but when he looks at it more closely he will see that virtually every other country in the world is using public funds to help ensure the provision of good-quality next generation broadband. Australia is using £22 billion sterling of taxpayers' money to that end. By no means are we saying that the amount of money that we intend to use from the digital underspend and the levy on fixed lines will be sufficient in itself, but we do believe that it will be enough to pump-prime as the market would not otherwise do—that is, to complete the final third of provision for homes and businesses. That final stage of provision will cover many people in the rural constituencies of Opposition Members.
	The hon. Gentleman asked about the timing of legislation. As he will appreciate, I am not going to comment on the next Session in Parliament: suffice it to say that this Government have made it clear that the digital revolution is one of our main priorities. As I said in my statement, it is a major part of our industrial strategy. He was wrong to say that not one urban area in the country has so far enjoyed digital switchover, because Exeter has.  [ Interruption. ] My constituents would be very offended if their city were to be described as anything other than a major urban centre. Exeter recently became the first digital city in the country, and very successful the switchover was too.
	Contrary to what the hon. Gentleman says, we anticipate that the rest of the digital switchover will go very smoothly. We are confident about that. We think that we are likely to be able to make the savings from the underspend that we have projected, and in fact believe that that may even be a conservative estimate.
	The hon. Gentleman also said that we are ignoring local news in favour of regional news. Far from it: the model that I have just outlined would enable exactly the sort of local news provision that he described, and not just by the independent television providers who will be invited to bid for this new pot of money. The introduction of digital radio will free up radio spectrum for local and community radio stations, which will be able to provide exactly the sort of very local news and content that he advocates.
	The hon. Gentleman said that instead of spending the digital underspend on the vital protection of the public service content of news in the nations and the regions, he would rather give the 75p a week back to the licence fee payer. All the way through his response, however, where he agreed with us about outcomes, he was prepared to will the ends but not the means.

Don Foster: Ensuring the success of our creative economies will be critical in rebuilding our economy, as the Secretary of State says. I hope that he would accept that we have a lot of ground to make up. His statement is a step in the right direction, but too many issues remain unresolved, such as the possible merger of Channel 4 and BBC Worldwide, and the inclusion of a return path in digital boxes. Why, for example, has he not even addressed the issue of the governance of the BBC? Surely we need an independent body, not a regulator that remains within the BBC. However, it is welcome that we now know who is to classify video games, that tax breaks for that industry are now on the agenda, and that we at last have a date for switchover to digital radio.
	As the Secretary of State said, protecting intellectual property, such as that in films or music, is vital. Millions of pounds are lost through illegal file sharing, and it must end. New commercial models, such as yesterday's welcome announcement of the deal between Universal and Virgin, will help, but I believe that the proposed statutory measures are needed, too. However, can he explain whether internet service providers will have legal indemnification for taking the action that they will be required to take, and who will bear the costs? Does he at least acknowledge that, now that they have delayed action in that area, there is very little chance that the Government will meet their 2008 promise to cut illegal file sharing by 70 per cent. within two or three years?
	Overall, the proposals for broadband have a far greater reach than many people expected, but I hope that the Secretary of State will accept that those in remote rural areas will be disappointed, as they will have to wait until at least 2017 before they get the benefits of super-fast broadband. Should not far more be done to drive forward initiatives such as smart metering, e-democracy and digital health care, to stimulate end user demand, and hence investment? Given the real fall in the cost of telecommunications, the proposed levy on all fixed lines to pay for near universal super-fast broadband is imaginative and broadly welcome, but even though it is a small sum, it is still a poll tax, so I hope that he will consider possible exemptions, not least for pensioners.
	Finally, I strongly welcome the plans to support regional and local news. I have no problem with the BBC's involvement in that, any more than with its role in helping with the roll-out of broadband, but I am deeply concerned about how that is to happen. The Secretary of State has avoided calling it top-slicing of the licence fee, but that is what it is. Whatever the language used, top-slicing sets a precedent that undermines the BBC's independence. What guarantees can we have that in future the Government of the day, especially when they are unhappy with something that the BBC is doing, will not take money from the licence fee to fund their pet projects? Surely the BBC should be involved at all stages, through the establishment of a partnership fund within the BBC, and a clear remit for the BBC to engage in such partnerships. Overall, there has been some good progress, but with 11 or 12 more consultations still to come, there is clearly much still to do.

Ben Bradshaw: There was a lot in that question. Let me begin with the hon. Gentleman's last point, because it was related to his first, about the governance structure of the BBC. His idea of a partnership fund is interesting, and is related to the point that he made at the beginning about the governance framework for the BBC, which is only two and a half years old; we have had an exchange in the Chamber about that previously. It is certainly a proposal that I invite and encourage him to make as part of his party's response to the consultation.
	The reason why I do not like the term top-slicing is that I think that most people out there cannot picture in their head what it means. If we talk about sharing something, it is more obvious what is meant; I think that that is a better way of describing the proposal. We will, through legislation if necessary, ensure that the proposal relates to a contained percentage of any future licence fee settlement.
	I welcome the hon. Gentleman's welcome for the measures to protect regional and local news. I note that he describes the levy as "imaginative", and I also welcome his welcome for that. I can assure him that we are considering exemptions for vulnerable people; again, he and other hon. Members may wish to make that suggestion clear in their response to the consultation.
	It is not just people who live in rural areas who are disadvantaged now and will be in future when the roll-out of next generation broadband happens. There are clusters in some urban areas and in quite a lot of market towns of people who are equally disadvantaged. They will be helped in the meantime by what we have announced today about the mobile phone spectrum, so I hope they will not have to wait until 2017 for the comprehensive improvement in the service that the hon. Gentleman describes. They will certainly be in a much better place, thanks to the announcement that we have made today about using the fund to help support the spread of broadband elsewhere.
	The hon. Gentleman made one other point, which I am afraid I have forgotten, but I will write to him about it.

Ben Bradshaw: As a former BBC employee, I agree with my right hon. Friend. The BBC is the best broadcasting organisation in the world, and it is one of this country's institutions, along with the national health service, of which the British people are most proud—in all surveys, whenever they are asked. However, I sincerely suggest to my right hon. Friend that the BBC has a far stronger argument for retaining the licence fee in the long run if it is prepared to share it with organisations and to help us address the problem, which many Members from all parts of the House have raised, about the non-viability of any plurality in local and regional news coverage without that level of support.
	If my right hon. Friend is worried about a principle being broken, he could have made that argument three years ago, when we decided to use a portion of the licence fee to help fund digital switchover. The BBC did not fight a battle over that; it was a very sensible thing for us to do, and Members from all parties signed up to it. I do not accept my right hon. Friend's argument, but I am a great defender of the BBC. It is in the BBC's interests to share some of the licence fee and to see itself as an enabler, rather than to feel that it and only it should have exclusive recourse to the licence fee.

Judy Mallaber: I welcome my right hon. Friend's reference to the safety and well-being of children through the proposals on the classification of video games, but will he take the time to meet the Children's Charities Coalition on Internet Safety, which on Monday launched its digital manifesto, to see how that might tie in with our proposals on a digital Britain, particularly to create a safe and exciting environment on the internet for children and young people? The coalition looks at issues such as child abuse images, dangers to children online, online access to age-restricted goods, advertising and the use of social networking sites. If that is to be an exciting future, we need to take on board all those issues, so I hope that my right hon. Friend will take the opportunity to talk to CHIS about its manifesto and how we can implement that, too.

Pete Wishart: We can all support the intention to improve the UK's digital infrastructure, but surely we should be doing more to protect and support creators, artists and the creative industries—particularly those on the front line of digital innovation. On piracy, does the Secretary of State really think it sufficient to ask reluctant ISPs to write to serial offenders and then perhaps threaten them with slower internet rates? Surely we should be looking for more bold, innovative solutions. When will we do something to challenge the culture in this "something for nothing" digital Britain?

Ben Bradshaw: That is not a fair reflection of what is in the report, and when the hon. Gentleman has time to read the piracy section in detail he will accept that it is not. One always has to strike a balance between over-regulation—using a sledgehammer to crack a nut—and introducing effective measures. We believe that the measures in the report are proportionate and will be effective. The evidence from other countries is that notification and identification have a dramatic impact on the amount of illegal file sharing.
	However, as I said in my statement, we are not ending things there. We are introducing legislation; we intend to introduce legislation that will enable internet service providers to suspend or narrow bandwidth for serial offenders. We are not going down the route that France has taken. As I am sure the hon. Gentleman knows, that has not worked; it is being challenged in the courts and the French are having to look at the issue again. Furthermore, we address such issues through the civil law, not the criminal law. The hon. Gentleman would not want us unnecessarily to criminalise a large number of young people.

John Grogan: Ofcom, the regulator, has estimated that the residual value of the ITV licence will be £45 million after the digital switchover, because of the use of the spectrum and ITV's position No. 3 on the electronic programme guide. Furthermore, the value of advertising in the regional news slot is estimated at about £25 million. Why cannot that £70 million be used to fund regional and local news, and partnerships with local newspapers, after the digital switchover? If the money is not to be used for that purpose, for what purpose will it be used?

Ben Bradshaw: We are certainly looking at the role that advertising could play to help supplement the support that the model will give to alternative local and regional news provision, as part of a plurality including the BBC provision. However, if my hon. Friend is suggesting that in the current—or even future—climate of digital Britain, ITV will be able to afford to sustain the level and quality of news provision that it has hitherto, I should tell him that not many people share that view. Nevertheless, if my hon. Friend can show, through evidence, a viable alternative or an addition to the measures that I have outlined today, we will of course be happy to consider it as part of the consultation.

Lindsay Hoyle: I am a member of the Business and Enterprise Committee, and as we have heard, we are going to look into digital access and broadband as well. I welcome my right hon. Friend's statement and thank him for ensuring that low-income families will benefit from funding for new access, but will he also ensure that rural parts of Lancashire gain access to the new broadband?
	On a broader scale, I welcome my right hon. Friend's commitment to regional television and media, which is very important in Granada land. As my hon. Friend the Member for Rossendale and Darwen (Janet Anderson) asked, will he ensure that the trial is in the Granada area? That is very important. Will he also ensure that local and community radio stations such as the world-famous Chorley FM also receive the funding that they need, along with our local newspapers the  Lancashire Evening Post, the  Chorley Guardian and the  Chorley Citizen? It is important that we have a broad mix and that there is true competition for the BBC. That will come only if we have regional news and current affairs programmes.

Richard Ottaway: In view of the concerns expressed by ITV about is financial viability, why is the Secretary of State delaying until 2013 the sharing of the licence fee to ensure plurality of news?

Ben Bradshaw: It will remain on FM for some of the new local and community radio provision that I outlined. We will consider providing help in the same way in which we did for digital television switchover. However, when we take into account the way the prices for digital radios are decreasing, and people's behaviour in the past with digital switchover for television and the change from black and white to colour television, I suspect that we will find that many people are already listening to digital radio. May I suggest to the hon. Gentleman that, rather than a lot of useless jumpers for his family at Christmas, he buy them a digital radio each? That will help along the way.

European Affairs

David Miliband: I beg to move,
	That this House has considered the matter of European affairs.
	I am pleased to open this traditional pre-European Council debate. The heavy European Council agenda shows why the UK needs a pro-European Government fully engaged with the European mainstream. On the range of issues that the Heads of Government will discuss in Brussels on Thursday and Friday—from economic supervision to climate change financing or strategic engagement with Pakistan—the decisions that the EU takes will directly affect the security and prosperity of British citizens. If we want influence, we cannot be on the margins.
	The first item on the Council's agenda later this week is the economic recovery. Over the past year, the EU has been at the forefront of the global response to the economic crisis. Last October, all 27 member states acted together to restore confidence in the financial system, agreeing to raise deposit protection thresholds to a minimum of €50,000. In December, we agreed an economic recovery plan, committing to provide a fiscal stimulus worth €200 billion, a figure that we have since met many times over. Indeed, according to President Barroso, the total fiscal boost now stands at 1.8 per cent. of the EU's GDP. If we include the automatic stabilisers, the net boost was somewhere around 5 per cent. At the spring Council in March, member states unanimously endorsed the goals of the London summit, providing a €75 billion injection to the International Monetary Fund, to enable it better to support the world's most fragile economies.
	This week's European Council will do two things on the economic front. The first is to take stock of the European economic situation since the London summit and consider measures to support the economy. With the Commission predicting a 4 per cent. decline in output across the EU, and with 60 per cent. of all our exports, 700,000 of our companies and 3 million British jobs dependent on trade with the EU, the Prime Minister is right that a strengthened European growth strategy is a vital component in the move out of global recession.
	We have already increased the resources available to the European institutions. Through its balance of payments facility, which was doubled to €50 billion, the EU has provided sizeable loans to Romania, Hungary and Latvia. However, further increasing the remit of the European Investment Bank and the European Bank for Reconstruction and Development will be important if we are to reignite the engine of growth. The Prime Minister has recently set out concrete proposals for the EIB to provide greater support to those in difficulty, through lending more, lending it faster and taking on more risk, to help stimulate a European recovery while commercial bank lending remains low. He will discuss those ideas with his counterparts in Brussels later this week.

Kelvin Hopkins: Angela Merkel has been critical of the way in which Britain has addressed the crisis, yet the economies in the eurozone, and in Germany in particular, have contracted more quickly that that of Britain. What is my right hon. Friend's response to Angela Merkel?

David Miliband: The hon. Gentleman makes an important point about the headline figures on jobs in the car industry, which often neglect to show the effect on jobs in the supply chain. I am sure that that issue will be discussed on Thursday and Friday.
	The second economic priority is to take preliminary decisions on the supervision and regulation of the financial sector. Regulation means setting the rules; supervision means checking that they are implemented properly. This requires the right balance of national and international powers. The Government have already made it clear that the Larosiere report and subsequent Commission proposals are a good starting point. There is much that we welcome, particularly in regard to improvement in regulatory standards and supervisory co-operation, and the establishment of a new European body—the European systemic risk board—to monitor emerging systemic risks.

David Heathcoat-Amory: Does the Foreign Secretary accept that the United Kingdom faces some extremely unwelcome proposals on financial and banking regulation? The Minister responsible in what was then the Department for Business, Enterprise and Regulatory Reform, the hon. Member for Dudley, South (Ian Pearson), has written a letter to the European Scrutiny Committee to say that we are now isolated on those measures. Will the Foreign Secretary confirm that we face being outvoted on these unwelcome and damaging proposals, which will regulate the City of London in a way that Parliament and the British Government do not want?

David Miliband: I do not accept that we are isolated, certainly not on the basis of the discussion that I had at the European General Affairs Council yesterday. There might be some confusion in the right hon. Gentleman's mind. What I am talking about here are the Larosiere regulatory and supervisory proposals. There are separate proposals in respect of so-called hedge funds, which are being discussed on a different track and will not be discussed this week. They are at a rather more preliminary stage.
	It might help the House if I just make the following point about the balance between international and national regulation and supervision. Improved regulation is essential if we are to keep up with the increased dynamism of international capital markets. That means introducing improved regulatory standards across Europe—an agreed rule book for financial regulation. However, this Government believe that micro-prudential supervision—in other words, supervision of individual companies—must remain at nation state level.

David Miliband: I think we will come on to that a little later. I can assure the hon. Gentleman, however, that there will be no majority voting at the European Council this week, that the proposals that we make will not represent Britain acting on its own and that we will be able to exercise our own democratic rights in a way that I think he would approve of.
	The second issue concerns climate change. It is vital that the EU continues to show leadership in achieving an ambitious global deal at the Copenhagen summit in December, and this Council provides an opportunity to push things forward. The green revolution is not just about avoiding devastating damage to our planet; it is also about avoiding another commodity price spike, which would be a major impediment to economic recovery. With the oil price now having hit the $70 a barrel mark, there is a real fear that, unchecked, it could choke off growth, just as we are working so hard to try to restore it. So tackling climate change is not a distraction from economic recovery, but a contribution to it.
	The Council must therefore build on the agreements reached in March and indicate its willingness to contribute financially to help secure an ambitious deal at Copenhagen, because we are now firmly on the path towards that December conference. The EU needs to reaffirm its leadership in advance of the Major Economies Forum in July—given new momentum by the new American Administration—at which questions concerning developed country financing towards mitigation, adaptation, technology support and capacity building will be a top priority.
	At their dinner on Thursday night, Heads of Government are expected to discuss the nomination of the next Commission President, which I hope is a matter of interest to the hon. Member for Stone (Mr. Cash)— [Interruption. ] I was not thinking of putting him forward as a nominee, I am sorry to say; I just thought I would get his attention, as I did not want him to doze off at this point and I had a nasty feeling that he might.
	From the UK perspective, and certainly from the Government's perspective, Mr. Barroso has been an excellent President, who has prioritised economic reform and better regulation, and pressed for EU leadership on climate change. So we fully support Mr Barroso's decision to run for a second term, and will continue to work with him to ensure the EU delivers on the UK's agenda for an outward-facing, globally competitive Europe.
	Another pressing issue for the Council is illegal migration across the Mediterranean.

David Miliband: I am sure I do not need to remind the hon. Gentleman that general elections are the way in which we decide the government of this country. He will not have that long to wait—a maximum of 11 months, according to any timetable—and I suggest that he contain his enthusiasm.  [Interruption.] That is very unlikely, says my hon. Friend the Under-Secretary of State from a sedentary position.

Mike Gapes: On the middle east peace process, does the Foreign Secretary agree that there is a need not just for a grudging statement from the Israeli Prime Minister about a two-state situation, but for concrete measures that will make an agreement possible, and that Israel therefore needs to stop—totally stop—the expansion and enlargement of the settlements? Will the Government hold urgent discussions in the near future with the United States as to a way forward, to exert the maximum possible diplomatic pressure to get a solution to this matter?

David Miliband: As my hon. Friend knows, it is certainly the position of the UK Government that settlement activity needs to be frozen, including natural growth, which is, of course, a commitment of the road map. In respect of engagement with the United States, I spoke yesterday to Secretary Clinton and former Senator Mitchell, and I think that the US role will be absolutely critical. However, I would also say that it is not just a matter of applying "pressure"; I think that the European support for Palestinian institutions is going to be important, and I also believe that there are responsibilities on the Arab states to think through how they will achieve the goals of the Arab peace initiative and how they will operationalise the very important vision set out in that. The EU can play a role in that regard, too.
	The third issue I want to touch on concerns the first ever EU-Pakistan summit, which will take place at UK instigation just before the European Council on Wednesday. Given the range of interests Europe has at stake, the UK has argued long and hard for more strategic engagement with Pakistan. There is a wide range of issues for discussion at the summit, including the following. First, there are the counter-insurgency operations in North-West Frontier Province and the consequent humanitarian situation now afflicting some 2.7 million or 2.8 million refugees, or IDPs. The EU has rightly pledged to make available a sizeable contribution to assist the displaced population, but it will also have a role to play in rehabilitation and reconstruction. Secondly, in respect of governance and democracy, the EU can and should help with institution building both at the centre and in the provinces by providing finance, advice and expertise. Thirdly, on economic development, the EU is Pakistan's most important trading partner, so it is right that we should do more to improve access to EU markets. To this end, the summit is looking to agree a step change in the EU's engagement with Pakistan on trade, leading to a free trade agreement in due course.

David Miliband: My right hon. Friend makes an important point. I am sure that he will have read carefully, as I have, the very important speech that the recently re-elected Prime Minister Singh made last week on how he wants to take forward relations with Pakistan. His point, at the heart of that speech, that Pakistan needs to take action against those who were associated with the Mumbai attacks is absolutely right. The fundamental building block of confidence for anyone in India—for the politicians and the people—in Pakistan's determination to be a reliable partner lies in its taking action on those associated with the Mumbai attacks. On that basis, I think there is then the prospect of a reciprocal action occurring between President Zardari and Prime Minister Singh, and I would certainly like to see that.

Gisela Stuart: While we are entertaining ourselves with the misfortunes of our prospective opponents' parties, may I invite the right hon. Gentleman to enter a wager with me? I would bet that by Christmas the leader of his party will gracefully have to give in to the demands of his MEPs to rescind the rather foolish decision to leave the EPP.

William Hague: My right hon. Friend puts his point fairly and powerfully. It is the making of such promises and the flagrant breaking of such promises which undermines trust in politics in this country, undermines trust in how the affairs of the European Union are handled, and thus feeds public disenchantment with those affairs.

William Hague: My right hon. Friend may be pleased to know that I did notice that, but I have noticed that for a good year or so in these debates, as Labour Members' morale has steadily sunk lower—although not quite as low as their party's election results last week.
	I was talking about the European Commission. Not all its legislative agenda has been wise; it is not coherent to seek to cut the costs of regulation on business on the one hand and then raise them by putting up the cost of employing temporary workers. The agency workers directive was rightly opposed by the Government until, in one of too many instances of their flaccid defence of British interest, that resistance was abandoned. That emphasises how important it is for us to restore our national control over social and employment legislation so that once again decisions on how best to help our families and businesses can be made here in Britain—a policy that today again received the support of the CBI.
	Most importantly of all, the Commission has stood against those who have called for protectionism—a brave position that was not helped by the Prime Minister's ill-advised use of the slogan, "British jobs for British workers". If Mr. Barroso is to be reappointed, I hope that the British Government will seek assurances that he will not be diverted from the course that he has set on free market issues over the past five years, that that will be reflected in the composition of the next Commission overall, and that the Government will urge that this recommendation is made now rather than drifting on until October.
	The Foreign Secretary referred to the discussion of new financial regulations in the context of this weekend's summit. The alternative investment fund managers directive and the proposals on EU financial services supervision could have a most serious effect on Britain's financial services industry, as one or two colleagues, including my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), said. The truth is that we have reason to be extremely concerned about how this legislation is shaping up and how the Government are handling the issue. There is not so much any fundamental difference of principle between the two Front Benches as a concern about how well the Government are pursuing the British national interest in these matters. There is a widespread belief that the Government have taken their eye off the ball, and it is now very important that Ministers focus on this.
	In the draft Council conclusions, there is a great deal of language about the need for "rapid progress" and legislation "as soon as possible", but it is surely far more important that we get the regulations right than that we get them quickly. Otherwise, we risk making the same mistake at European level that the United States made with the Sarbanes-Oxley Act. Instead of rushing into ill-considered regulation, we should be facing the immediate challenge of rebuilding confidence in European banks.
	Even within the Commission grave concerns are privately expressed about the lack of proper consultation and of a thorough regulatory impact on the proposed fund managers directive. That point has been powerfully reinforced this week by the Lords EU Committee report into the future of EU financial regulation, which concluded that
	"the desire for speedy action must not come at the expense of thorough consultation, impact assessment and risk analysis by the Commission in line with their own Better Regulation principles."
	After months in which Treasury Ministers have been absent from the European debate, although they are part of a Government who always lecture us on taking part in European discussions, we welcome the news that at last Lord Myners is to visit Sweden to discuss these issues with the incoming presidency. We hope that at the Council the Government will ensure that the final language reflects Britain's interests.
	The establishment of a European systemic risk board is to be strongly welcomed; we support better analysis of the macro-prudential risks. However, decisions on what action should be taken in response to the risks that the board identifies are taken by national Governments, not by the EU. The board must embrace the whole of the EU, so it would clearly be inappropriate for it to be chaired by the president of the European Central Bank.

David Heathcoat-Amory: I think that I can help my right hon. Friend and the House, because we have the draft conclusions, although we did not obtain them from the Government: we had to obtain them from the Danish Parliament website. It is clear that the Council has already decided to go well beyond macro supervision by regulating alternative investment funds, undertaking micro-prudential supervision, and setting up a European system of financial supervisors going way beyond what my right hon. Friend suggests. We are really up against it. We are already isolated, and it is apparent from the conclusions already published that the Government have already given in.

William Hague: The hon. Gentleman will know that I will go part way with him on that. Of course we should stay well clear of the eurozone, but I am not going to hazard a guess at the relative severity of the recession in different countries. I suspect that all of us who are suspicious of economic forecasts would do well to avoid such predictions.
	There is one more subject that I wish to raise, and I shall try to do so very briefly. I know that the Foreign Secretary is extremely concerned about it, but he did not mention it in his remarks. It is the position in the western Balkans, and I make no apology for taking a few minutes at the end of my speech to raise the matter.
	Although Bosnia and Herzegovina signed a stabilisation and association agreement with the EU in 2008, the country seems to be stuck. Important conditions go unfulfilled, few laws are passed, the central institutions are undermined and movement towards the EU is barely discernible. The entity of Republic Srpska continues to unravel some hard-won gains, including reforms required by the EU. Last month, the Republic Srpska Parliament voted to transfer all 68 state powers to entity levels, meaning that that part of Bosnia would no longer be bound by laws passed in the country's capital. The High Representative in Bosnia has called for the decision to be revoked, but last week, Republic Srpska pressed ahead none the less, reversing the principal achievements in the past 14 years of the international community's efforts in Bosnia without a single cry of protest, as far as I could detect, from European capitals.
	We are greatly concerned that the framework that helped Bosnia make remarkable progress since the end of the war in 1995 is being gradually dismantled. The office of High Representative is expected to close in October. The use of Bonn powers has become unpopular in EU capitals. There is a desire for transfer of power to an EU mission, perhaps prematurely. We hope that the Government will agree with us and make it clear to other European countries that the international High Representative in Bosnia must have rock solid support from the EU and the rest of the international community as he addresses the problems, even if he deems that circumstances require him to exercise his Bonn powers.
	The lack of progress in Bosnia in the past three years has been accompanied by the downsizing of EUFOR's deterrent capacity. As that trend continues, there are reports, about which Ministers may want to comment, of plans for EUFOR to relinquish its UN chapter VII authority, which we do not believe is justified. I hope that the Government agree that the international executive powers in Bosnia need to be retained for some time, along with a credible enforcement capability, as well as external guarantees for security and the rule of law—in particular the international judges and prosecutors, who are mentoring the fragile state institutions there.
	Is not it also the case that stopping the backsliding in Bosnia will require sustained, high-level US involvement? I hope that the Foreign Secretary will pursue with his US counterparts the idea of a new US special envoy to Bosnia to prevent such backsliding. Continued efforts should also be made through the International Criminal Tribunal for the former Yugoslavia to achieve justice for victims of war crimes and crimes against humanity.

Gisela Stuart: It is a great honour to follow the right hon. Member for Richmond, Yorks (Mr. Hague). Many of us in the Chamber have spent years debating matters European, and I hope that I will be forgiven for returning to some matters that we have talked about before, because this debate comes in the wake of the European elections.
	We cannot ignore the fact that, yet again, we have had European elections in which voters have cast their vote on anything other than the matters of Europe. It was the same in the four European elections in which I took part from 1994. The electorate go out and cast their votes in dwindling numbers on something that is not on the ballot paper. This time, we should be worried about the fact that around one third of the Members who represent this country in the European Parliament have an agenda based on not co-operating in any way. None of the major political parties can be proud of what happened a couple of weeks ago.
	I also hope that the Foreign Secretary or his ministerial colleague in his winding-up speech will address the fact that, were the Lisbon treaty to be ratified, it would create an extra MEP for the United Kingdom. However, I am not entirely sure how the Government intend to deal with that, if the treaty were to be ratified.
	I have thought about how we could deal with the complete disengagement from Europe. My right hon. Friend the Member for Rotherham (Mr. MacShane) and others keep telling us that we need to learn to love Europe, and I thought, "How do you learn to love a foreign country?" I cast my mind back to what it was like when I arrived here 30 years ago, and I remembered that three things struck me then that probably still apply to Europe. One was that when people say, "How are you?" they do not want to know how the other person is—it is a kind of ritual. It took me a long time before I realised that one does not answer; one just says, "Fine, thank you." Similarly, European elections may be called elections, but they are not what we might think they are. They do not result in a Government whom people recognise or in a change of political direction, so although we call them elections, they are not elections. European elections are something in the democratic process that we have not yet learnt to define—they are almost like a Europe-wide opinion poll on something. We call them elections, but people simply will not engage if they do not have a definable influence.
	The second thing—again, it took me a long time before I realised this—was that neither Danny La Rue nor Dame Edna Everage were what they seemed to be. That is so obvious to the natives, but no one ever spells it out to those who come here as foreigners. Eventually, one finally realises Dame Edna ain't no dame—and certainly no Edna either—and the European Parliament is pretty much the same. We call it a Parliament, but it does not do anything that we would recognise a parliamentary democracy as doing. The European Parliament is a caucusing body that is incredibly responsive to lobbying institutions, but it is completely unresponsive to public opinion. It may have been a long time before we got the message of what people thought about how we organise ourselves in this place, but, whatever one says about the past few months in the British Parliament, we did get the message. There were mechanisms that meant that we had to respond to the public, but the European Parliament and the Commission almost take pride in being unresponsive to what the public think.
	The third thing—this one probably took me the longest—struck me while listening to Mornington Crescent on "I'm Sorry I Haven't a Clue". For those who do not live in the metropolis or are unfamiliar with the tube lines, it can take a pretty long time to realise what the true rules of Mornington Crescent are.

Gisela Stuart: I agree with the hon. Gentleman, but only up to a point. I would love to blame the press, but on this occasion, I do not think that that would do any good. There are institutional problems involved. For example, it would be worth seriously considering the proposal that an incoming Commission should press the delete button on any proposals from the previous Commission's term that have not been completed. Such proposals should simply go, rather than being negotiated right to the end. We should also stop the rather dishonest system of delaying implementation. When something is politically difficult and a compromise is just about reached on it, the final dodge is to delay its implementation for a further five or 10 years. That means that no one who made the decisions is ever accountable for them.
	The third problem is one that really grieves me. I know that the recent reshuffle was not the Foreign Secretary's responsibility, although some of us might quite like him to be the person who does the reshuffling—[Hon. Members: "Ah!"] But that is neither here nor there. We now have a Europe Minister who is not in the Commons, and that is deeply unsatisfactory. I would quite like the Europe Minister to have almost the status of a Deputy Prime Minister. I would like them to have the role of UKRep—the UK permanent representative in Brussels, a political role—and to be accountable here for all the compromises and deals that we strike. That would address the problem of the deals and negotiations not being reported here. The reason that they are not reported and debated in a meaningful way here is because, first, they are very long-winded and drawn out, with some lasting well beyond the lifespan of a Parliament, and, secondly, they are usually part of a trade-off. We cannot neatly label them as being simply health matters or environment matters, for example; they are always part of a trade-off. UKRep would fulfil the role that I have described.
	If we in this place are serious about these matters, we must not fool ourselves. To reassure myself that I was right, I recently attended two European Committees. One was on external services; the other was on the environment. They really are the stuff that masochists are made for! We sat there for hours, for absolutely no purpose whatever. Everything that we were told was hypothetical—these things might or might not happen—and no decisions were reached. So, just being told more would not be the answer. When the Foreign Secretary talks to his colleagues here, he needs to engage with the election result and seriously think about the question of accountability and the fact that we are going in the wrong direction.
	Finally, on a separate note, we have talked about the new Pakistan council, which will be an extremely important development. However, those of us who go out to Pakistan and Afghanistan are surprised by the absolute plethora of representatives involved. There is the UK special representative, the French special representative and the Spanish special representative, as well as the EU Commission representative and the EU Council representatives. It would be really worth while for our European partners, as well as the Council and the Commission—which are often dually represented—to decide who should take the lead and to co-ordinate these arrangements much better. We have an important role to play in areas such as Pakistan and Afghanistan, but, at the moment, we are probably still speaking with too many voices.

Edward Davey: The hon. Gentleman makes a very good point, but I would point out that the noble Baroness Thatcher, in her first Administration, appointed a Foreign Secretary who was in the other place. The Conservatives therefore need to be slightly careful on this matter— [ Interruption. ] The right hon. Member for Richmond, Yorks (Mr. Hague) cannot simply say that that was a long time ago. It was at the time of the Franks inquiry, and I could take him back to another point that does not reflect well on his party.
	The hon. Member for Birmingham, Edgbaston made a very good speech, although I have to say that, when I was on the doorstep, I found that those who wanted to engage in a debate on the European issue—some of whom were hostile to my opinions—actually relished the opportunity to do so. They saw it as separate from all the other issues that we debate as politicians. So I would not want to see the elections go away; they are a healthy part of our democracy. And let us face it: the whole debate in the media and in this place in the run-up to the elections was dominated not by Europe but by expenses. That was one of the reasons why the campaign was quite disappointing.
	I had an interesting radio debate with the hon. Member for Rayleigh (Mr. Francois) during the campaign. He and I were eager and enthusiastic in that debate, because it was the only one that we had in the broadcast media throughout the whole campaign. We disagreed vehemently on the issues, but we both felt that it was quite wrong that that was the only time that Front-Bench spokesmen had been allowed on to the media to debate Europe during a European election campaign. We need those debates during our campaigns, in order to connect with the voters. Yes, there might have been exceptional circumstances, but the media need to be criticised for not attempting to compensate for them.

William Cash: If I may say so, I think that the hon. Gentleman is effectively insulting the Irish people by referring to the claims as bogus. Anyone who knows anything about the issue—I am wondering whether he does—knows the reality. As a confidential memo handed over only yesterday to other member states—the Foreign Secretary knows about this, as do I as a member of the European Scrutiny Committee—clearly indicates, the legal guarantees being provided are worthless in the context of treaty change. The hon. Gentleman referred to protocol; if what he said were true, it would actually change the treaty, so he should just stop insulting the Irish people.

Sammy Wilson: I notice the relish with which the hon. Gentleman contemplates the discomfort that he believes the Conservative party may feel if the matter has to go to referendum, but does not his own speech suggest that he is afraid of a referendum? He wants to try to reassure the Irish so that they will accept the Lisbon treaty and not protest as they did last time, and he does not want a referendum here, yet he claims that the people of the UK want to connect with Europe. Is not the best way to connect people with Europe to give them a say on whether they want further European integration?

Adrian Bailey: The hon. Gentleman potentially opens up a lengthy debate. All I can say is that these issues are properly negotiated and debated within the Council. There is a difference of opinion within the European Scrutiny Committee on whether it is necessary to have a European structure as opposed to an international structure, and whether Britain's best interests might be served in engaging with an international structure. Hon. Members will have differing approaches on that.
	Given that the EU consists of 27 countries, including several of the world's major economies, and is a major economic force in terms of the eurozone, just as the City is a major financial source, I cannot believe that it is not better to combine the strengths of that bloc to represent European interests on the international forums more effectively. We have been engaging with the G20 to ensure that a world economic recovery takes place, and nobody has argued that that should preclude work undertaken at the European level with broadly the same economic objectives. I do not share the position that the hon. Gentleman outlines, but I recognise that it exists. I believe that there are global international financial movements that have to be looked at on a global scale, regional financial movements—and corporations and bodies that operate regionally—for which it is appropriate to have regional supervision, and national corporations, for which it is appropriate to have a national level of supervision.
	Specific areas of concern were highlighted during the Committee's investigations, the first of which related to whether the European systemic risk council should deal with the whole of Europe and whether the way in which it is being proposed, under the presidency of the European Central Bank, was likely to mean that it focused only on the eurozone. It is clearly necessary for this particular body to deal with the whole of Europe, including countries, such as Britain, that are outside the eurozone. Another issue was whether its chair could be the president of the ECB, because in its deliberations and considerations it may have to look critically at the ECB. A clear potential conflict of interest is involved, and that issue must be addressed. The risk council should include the national regulators, and that should include the Financial Services Authority. I hope that Ministers will take up those issues and prosecute them effectively at the Council.
	There will obviously be a tension between the national supervisory framework and the potential European supervision. I believe, and I know this to be the feeling of British financial institutions, that any outcome must be sensitive to the specific needs of the structure of the British financial services industry. In the past, building societies have been concerned that Britain's supervisory financial regulators have not had sufficient understanding of, or sympathy for, the mutual movement. That situation could be much worse if the balance of regulatory power moved away from this country to Europe. That is a matter of considerable concern, and it is fair to say that we would expect our Ministers to prosecute that particular argument very effectively.
	There are issues to address in relation to credit rating agencies. I know that our ministerial team is rather at odds with the Commission's recommendations on those. There is a serious issue associated with the credibility of credit rating agencies. The power that they have in their classifications has enormous significance for the survival of financial institutions, yet historically—this includes their role in the credit crunch—they have not been beyond criticism. Who regulates or monitors them to see just how accurate and relevant their ratings are? There is far more credibility than one might think, but I hope that the Minister will ensure that whatever model comes out of these deliberations will provide effective national accountability for organisations in this country, with particular reference to the sort of model that credit rating agencies use to assess British financial institutions. There is a need for much greater transparency and more monitoring of the outcomes of the ratings that those agencies give. Our track record in Europe in getting effective European action on the recovery is good, but the issues that I have mentioned must be vigorously addressed in the debates that will be held.
	The broad thrust of the Commission's proposals is good, and the EU could play a vital role in leading the world economic recovery by re-establishing faith in the international financial system, but we must ensure that the proposals that we adopt are sensitive to the needs of the British financial services industry. The City is a major world financial centre, and the potential consequences of getting it wrong are serious indeed. We need a regulatory and supervisory structure that recognises not only the strength of the financial services sector but the diversity of provision within it.

Mark Lazarowicz: I am grateful to the right hon. Gentleman for giving way, not least because I had to miss the beginning of his speech; I had hoped to be here for it. Do not the draft conclusions—their publication is quite normal practice in many international negotiations, but never mind about that—reflect the fact that in the European parliamentary elections the Eurosceptic parties did not make progress in Europe as a whole? They made progress in some countries, but in many countries the parties that took the most anti-European, Europhobic or Eurosceptic line made no progress. Do not the draft conclusions reflect the general opinion throughout Europe? Is that not what should be happening?

David Heathcoat-Amory: No, that is not my reading of the results at all. Rejectionist parties made a clear advance in other member states. In this country, overwhelmingly, the majority vote was for parties that want to leave the EU altogether or that want at least to reject the treaty of Lisbon. According to the conclusions, the Council has nothing to say about that at all. It is business as usual. Let me make a suggestion to the Under-Secretary, who apparently now speaks for Europe in this House—although I welcome him to his new position, I greatly regret the fact that we do not have the Minister for Europe in the democratic House. If he wants at one stroke dramatically to show that he has learnt the lessons of this disillusionment, will he keep the promise that his party and the Liberal Democrats made before they were elected to have a referendum on the Lisbon treaty?
	We have a constitutional crisis in this country. It is a crisis of self-government that is undermined by the progressive transfer of powers to another jurisdiction. The Prime Minister talks about devolution, but he means the opposite. He talks about accountability, but he means or does the opposite. He talks about openness, but we have a culture of secrecy and a refusal to listen to democratic outcomes.

Mike Gapes: I am grateful to the hon. Gentleman for that intervention, as it allows me to develop an argument that I was going to come to anyway. However, I did not mention another interesting phenomenon: one of the countries that is seriously considering joining the EU, despite its historic problems with fisheries, is Iceland. The newly elected Government there have recognised that, in this global world, they need the protection of a big organisation.
	Iceland is one of the most extreme examples of what the crisis of unfettered and deregulated liberalisation has caused. One consequence is that the Icelandic Government recognise that they need the support of other countries, but there is a problem, and the hon. Member for East Antrim (Sammy Wilson) alluded to it. It is that the EU needs to get away from its obsession with the institutional agenda and think of ways that it can assist the many countries on its periphery to become members.
	There is, of course, quite a lot to be discussed in that regard. One of the items on the agenda of the forthcoming Council will be a debate about the so-called eastern partnership. Unfortunately, there are signs that some of the bigger countries in the EU are growing cold on the future enlargement agenda. I think that that is very disappointing.
	There is a growing queue of countries wishing to join the EU. I have mentioned Iceland already, but the others include Montenegro, Albania, Croatia, and Bosnia and Herzegovina. Earlier, the shadow Foreign Secretary referred to the difficulties that Bosnia and Herzegovina is experiencing with Republic Srpska and growing nationalism. The real danger is that, 14 years after the Dayton process, we could, through lack of attention, find ourselves with a new crisis in the heart of the Balkans. Then, of course, there is Serbia, and Turkey has had an outstanding application to join for many years.
	I want to say something about the importance of the EU's future enlargement. It would be a terrible tragedy if, at this time of economic uncertainty and crisis, we started to put up barriers to the future enlargement of the EU. If we create an arc of instability in the Balkans and say, in effect, that the existing EU is full and cannot have any more member states, that would send out very bad signals for the future stability of the Balkan states. In addition, it would also send out signals to those other eastern partnership countries which, although they may not be candidates for EU membership, are nevertheless important neighbours of the EU.
	I refer the House to the crisis that is developing in Moldova, and to the authoritarian and anti-democratic tendencies of President Saakashvili's Georgia. If the EU does not provide economic and political support to the neighbour countries—I am not talking about membership—we will find that Russia will once again try to have a hegemonic role in the region.
	Russia is not a pluralistic democracy in the western European model. It sees itself very much as a country with a near-abroad, and that is an area that it will want to dominate. That is not the kind of Europe that we want, the kind that will lead to the prosperity and peace that have been developed by the EU over previous decades.
	The Swedish Government are about to take over the presidency of the EU. Sweden, along with Poland, has developed the concept of the eastern partnership, and it will no doubt be trying to take that concept forward over the coming six months. I believe that we need to take seriously the Swedish and Polish initiatives on these matters, as there is a clear need for EU countries to extend their focus beyond their internal problems. We must recognise that neighbouring areas—the applicant countries in the Balkans or the partnership countries to the east—provide very important lessons. We must not allow our internal obsessions to cause us to fail to provide co-operation, assistance and help for our European neighbours.

Mike Gapes: I agree absolutely with everything that the hon. Lady said. The Serbian Government have a clear foreign policy priority of integration into the European Union, but progress has been slow, and not just because of the difficulties with regard to Kosovo. The European Union Foreign Ministers have not activated the trade-related parts of Serbia's stabilisation and association agreement, following the arrest by Serbian authorities in July last year of Radovan Karadzic, the former Bosnian Serb leader. Serbian politicians of all kinds ask, "Why not?" They feel disappointed. The reason why progress has been slow is that the Dutch Government, in particular, have continued to oppose the unfreezing of the SAA for as long as Ratko Mladic, the former military commander of the Bosnian Serbs, remains at large. He is one of the two remaining indictees of the International Criminal Tribunal for the Former Yugoslavia in The Hague.
	There have been reports in the press recently that the issue of Mr. Mladic is resurfacing in debates and discussions, and it may be that steps will be taken to deal with that issue in the near future. Similar action was taken in Croatia a few years ago, and that accelerated the opening of the talks with the Croatian Government, but sadly there are now problems with Croatia's application for membership because of a territorial dispute to do with a bay between Slovenia and Croatia. That is causing difficulties, and is unresolved. The Czech presidency has failed in its efforts to make any progress on that issue; it will have to hand that on to Sweden, too.
	In other parts of the Balkans, the situation is more positive. Montenegro submitted an application in December. On 23 April, the Council of Ministers invited the European Commission to submit a formal opinion on that, as a first step towards possible enlargement. Similarly, Albania applied in April. Hopefully, the first assessment of that application will take place in the near future, in the autumn. So there is progress in some areas, and it is important that that progress continues. In a sense, if we are to resolve the problems that came out of the civil war in the former Yugoslavia, the best solution is, as the hon. Member for East Dunbartonshire (Jo Swinson) says, to recreate a mechanism within the European Union through which there is trade and free movement of peoples, so that borders, and historical animosities, are overcome within the context of an enlarged European Union.
	The European Union is the way forward for many in Europe, but it is sad that debate in this country is dominated by an obsessive Eurosceptic media. It is absolutely the case that in the European elections, the Labour party had dreadful results, but the votes for the other main parties were also down significantly. There were different results in different European Union countries in the elections. The right hon. Member for Wells (Mr. Heathcoat-Amory) gave the impression that the Eurosceptics had won everywhere in the European Parliament elections; that is not true. In some countries, the pro-European parties of the centre right had very good results. In France, an ecological, green party led by Dany Cohn-Bendit did extremely well. One cannot say that there is a generalised trend. In some countries, the percentage poll went up. In other countries, it fell drastically. The problem, I suspect, is that because there is not a general European media, in every country, the elections were reported and campaigned on in national terms.

David Wilshire: I always find these debates fascinating. I see that the Annunciator says "European Affairs", but these debates are usually about the European Union. I still have an atlas that has Norway, Switzerland and Russia in Europe, so this is not wholly a debate about the European Union, and I want to speak on a different subject. I have the pleasure and the privilege of leading the Conservative delegation to the Parliamentary Assembly of the Council of Europe. There is a team of 11 of us, and as I said earlier, our group is separate from the European People's party. I rather think that we do a good job in that guise.
	I want to speak because I believe that the Council of Europe matters. It is the oldest of the pan-European institutions, and it still has a real role with regard to democracy, human rights and the rule of law. It has done important work, and it still has more important work to do. In and among the work that it has done, there are some major and important successes for the continent of Europe. The most notable of all, and one that most people know a little bit about, is the European Court of Human Rights, although I keep being told that it belongs to the European Union. Nevertheless, there is something that the public recognises of the work that we do. Sadly, people do not know much else about it. People do not understand very much about why the Council of Europe is important.
	Even more sadly, as I view it, all is not well with the Council of Europe. That is what prompted me to speak, and what I want to speak about. I urge this Government, and the next Government, to take the matter seriously, and to do their level best to make sure that things are put right. I fear that the Council of Europe has lost its way. It seems to wander ever further across subjects that are not its core business, and ever further across the globe. Of course, any organisation that believes in democracy wants to spread it, but we are talking about a Council of Europe, not a mini-United Nations. There is work to be done there.
	Even more importantly, the Council of Europe, the oldest pan-European institution, the originator of the flag which has been hijacked by the European Union, is being upstaged—

Ian Davidson: It is a matter of great regret to me that the Government's policy can best be characterised as "no compromise with the electorate." Irrespective of whether we agree with the results of the recent European elections, we are beholden to pay some attention to them. It might very well be okay for the Foreign and Commonwealth Office to take the view that the people have let down the Government, but it is not appropriate for an elected Government to take that view. As the Foreign Secretary was outlining the Government's policy on the forthcoming European Council, it struck me that not a single word, jot or comma had been changed as a result of the European elections. Not the slightest attention had been paid to those results, and that is a cause for some considerable concern.
	The party that secured the most votes would generally be seen by the public to be Eurosceptic, and the party that got the second highest number of votes would generally be seen to be "withdrawalist". The Government were characterised in Europe by two things: first, that they were enthusiastically in favour of ever-greater union; and, secondly, that, having promised a referendum and then refused to provide one, they were damned by it. The party that is most enthusiastically in favour of the European project, the Liberals, came quite a bad fourth. That balance of voting was not just simply an act of God, random or due to the expenses scandal; it represented a clear pattern of political opinion in the United Kingdom.

Ian Davidson: I am always glad to have my points reinforced. It is perfectly clear that the level of extravagance in the European Union at present is not justifiable.
	Finally, I want to pursue the question of the Opposition's position on the referendum. I was not satisfied by the response given to me by the right hon. Member for Richmond, Yorks (Mr. Hague), who spoke on behalf of the Conservative party. I genuinely do not understand what the Conservative party intends to do. I do not accept that it will inevitably form the next Government, but if it does, and if the treaty has been ratified, will they hold a referendum or will they not?
	The issue is of particular importance because there are substantial numbers of UKIP voters in my constituency, as there are in many other constituencies. I have discussed the matter with them; many said that they voted UKIP in the European elections but that they will vote for the Conservatives in the general election because they think that they will give them a referendum. I do not believe that that is necessarily true.

Robert Walter: I am interested to hear the hon. Gentleman's view on that.
	Today I want to deal with a question of democracy in Europe: the denial by Governments of well-established principles of democracy in the Council of Europe. Her Majesty's Government are not only complicit in that denial, but are a leading advocate of it. I should give a little background. Mr. Terry Davis, a former Member of this House, has been the secretary-general of the Council of Europe for some time. Before that he was a member of the Parliamentary Assembly of the Council of Europe; in fact, he was the leader of the socialist group there.
	We are in the process of seeking a replacement for Mr. Davis. The person replacing him will be elected by Parliamentary Assembly members, who are Members of Parliament from the 47 member states of the Council of Europe. In the same way, judges at the European Court of Human Rights are democratically elected by parliamentarians from across Europe.
	Some would say that as the secretary-general for the past five years has been a socialist, it is now time for someone from the centre right to have a go at the job. However, I do not want to portray the issue in a party political manner, because the election, which is due next Tuesday in Strasbourg, will involve a vote on the nomination by the Committee of Ministers' Deputies, who are the ambassadors. The committee has given the Assembly a list of two to choose from, and I shall come back to those two in a moment.
	What is at stake next week is the very position and credibility of the Parliamentary Assembly, and that debate has nothing to do with individual candidates for the post. In a strictly legal sense, the regulations for the election were drawn up in 1956. As long as they are not formally changed by agreement between the Committee of Ministers' Deputies and the Parliamentary Assembly, only those regulations are valid. Until today, the Committee of Ministers' Deputies had not proposed to review the criteria applicable to candidates for the post of secretary-general. The long-standing practice, in force for more than 50 years, has involved co-operation, consensus and consultation between those two important pillars of the Council of Europe.
	However, on this occasion the Committee of Ministers' Deputies did not respect the existing procedure and rules as it had in all previous elections for the post of secretary-general. In all the previous elections, all the candidates nominated to the Committee of Ministers' Deputies were forwarded to the Assembly for it to deliberate and vote on. Our diplomats—for they are the people who normally sit on the Committee of Ministers' deputies—have created a problem by coming up with a draft opinion on a shortlist of two candidates, instead of the four who were nominated. They did so because they believed that they were solving a problem, created by their Governments and by the Assembly, which endorsed the so-called Juncker report in 2005.
	I stress that the Juncker report, drawn up by the long-serving Prime Minister of Luxembourg, Jean-Claude Juncker, with its 15 proposals, is an excellent document—but it is not the law. Among much else, the report contained the wish that the next secretary-general should be a high-ranking figure in European political life. The diplomats therefore advised their Ministers to present a list of two candidates to the Assembly next week, because, in the opinion of the ambassadors, those candidates meet the so-called Juncker criteria. The ambassadors would have preferred more candidates under those criteria, but unfortunately Mr. Blair became special envoy to the middle east, Mr. Rasmussen went to NATO, Mr. Putin became Prime Minister of Russia, and Mrs. Merkel, Mr. Sarkozy and Mr. Berlusconi were unavailable. Our own Prime Minister might become available, but probably not before September.
	The ambassadors' list therefore became a very short shortlist. They then created a huge problem by not accepting the candidacy of two other applicants, both of whom happen to be members of the Parliamentary Assembly, as well as the leaders of two of the larger political groups in the Assembly: the European People's party—the Christian democrats—and the Liberal group. Incidentally, they both meet the Juncker criteria, as they have been Ministers and are certainly notable figures. The ambassadors also forgot that the rules are clear that the Parliamentary Assembly has to be consulted before a decision is made on a list of candidates. In April, my hon. Friend the Member for Ryedale (Mr. Greenway) produced a report for the Parliamentary Assembly that provides complete clarity on the issue; I congratulate him on that. However, the Ministers cannot pick and choose from the Juncker proposals; they must respect the rules and procedures.
	At their meeting in October 2008 the Ministers' deputies—that is, the ambassadors—decided that candidates should comply with the criteria set out by the Ministers in 2007. The key point of the criteria is that candidates should have previously served as a Head of State or Government, or have held senior ministerial office or similar status relevant to the post. On that basis, candidates applied and were invited for interviews, and the four candidates apparently fulfilled the criteria. After the closing date for the receipt of nominations, and following a series of votes, the Ministers' deputies changed the procedure and the criteria to a more restrictive interpretation. For ambassadors involved in what is essentially a democratic procedure, that is unprecedented. The Foreign Ministers of member states apparently made a decision, and their deputies decided that they would accept as candidates only former Heads of State or Government. The Ministers' deputies decided to establish different criteria after the closing date for the receipt of nominations.
	It must also be emphasised, with great regret, that the Ministers' deputies never considered it appropriate to consult the Assembly before making their decisions. In the past, all regulations relating to the appointment of the secretary-general were adopted by the Committee of Ministers, with the agreement of the Assembly, yet the Committee of Ministers now took a decision prior to any consultation with the Assembly. The Ministers' deputies—the fonctionnaires, or civil servants—moved the goalposts while the game was under way. If they want to apply other criteria and another procedure, that must be done in co-operation with the Assembly, and prior to the opening of the election procedure. They failed to do that.
	In effect, this is an institutional coup d'état and an unacceptable limitation of the prerogatives and competences of the Assembly and its parliamentary representatives, all of whom have been democratically elected. This is a test case and a precedent for the Assembly—the parliamentary guardians of democracy and human rights in Europe—regarding one of its most important prerogatives: the election of the highest officials of the Council of Europe. Members of Parliament from across Europe are now unified on this principle, yet the weight of all future elections, including the election of judges, could, if we are not vigilant, shift to the officials, to the Committee of Ministers and to the Executive.
	This debate is about the principle of parliamentary democracy. It is about the balance of power between Executives and Parliaments. In many countries across Europe, that battle goes back over several hundred years; in some younger democracies, it is as recent as 20 years ago. It is about the balance of power between the Executive and Parliament: in this case, between the Committee of Ministers and the Parliamentary Assembly. We must remind the Foreign Secretary and his representative on the Committee of Ministers that they represent national Governments: they are ambassadors, functionaries, advisers. They advise the very same Governments whom we collectively, as parliamentarians across Europe, authorise and oversee in our daily work.
	The democratic legitimacy of the Council of Europe Assembly is beyond question, but I question the procedure in this process. First, it is normal practice for the Committee of Ministers to look at all candidates and forward the list to the Parliamentary Assembly. In this situation, therefore, had the Committee of Ministers followed custom and practice, the names of all four candidates would have been submitted to the Parliamentary Assembly.
	Secondly, the Committee of Ministers normally acts by consensus. I can count on the fingers of one hand the number of occasions on which it has taken a vote in the last five years—so why on this occasion, unless it was looking for confrontation, did it decide to use the voting procedure? Why not use the normal consensual procedure to arrive at an opinion which could have been forwarded to the Assembly, and which we would have respected?
	Thirdly, I believe that this is a cynical attempt by the Committee of Ministers to prejudge the decision of Members of Parliament. It has submitted two candidates. One is clearly its favourite; the other, although he meets the Juncker criteria, is probably unacceptable to the Assembly. It has therefore decided already and ensured that we in the Assembly have no decision to take on the election. I believe that the rejection of two candidates from the Parliamentary Assembly is a blatant attempt by the Committee of Ministers to shift the balance of power from elected parliamentarians to appointed ambassadors. Custom and practice say that they should have sent us all four candidates. We may well eventually choose their preferred candidate—he is the Speaker of the Norwegian Parliament and a former Prime Minister—but that is up to us to decide. We in the Assembly are the guardians of democracy in Europe.
	The Government should take note of this: in April the Assembly voted by 158 votes to one to reject the procedure adopted by the Committee of Ministers. If that had been a vote in this House—and therefore a resounding rejection of a Government position—Ministers would have had to think again, but the functionaries and the Committee of Ministers' Deputies battle on with their established position. I hope that the Minister will tell the House that he will now endorse the proposal that the Committee of Ministers, when it meets the Parliamentary Assembly on Thursday, should present the Assembly with a list of all four candidates on which the Committee can indicate its preference, as foreseen in the rules. Anything else will be a negation of the very principles of democracy on which the Council of Europe is built.

Mark Lazarowicz: One of the issues that will be high up the agenda for the meeting at the end of this week will be climate change. All the parties currently represented in the Chamber recognise the importance of tackling climate change. The evidence is mounting that even previous projections for the rate at which global warming was taking place have been on the low side. Much depends on the possibility of the world's agreeing a comprehensive climate change treaty at Copenhagen later this year. It is fair to say that if that agreement is not reached we are almost certainly beyond many of the famous tipping points after which damage from climate change will be irreversible.
	We all know that reaching a climate change agreement at Copenhagen will be extremely difficult. Notwithstanding the commitment of the Obama Administration, there are signs that there will be difficulties in getting a comprehensive agreement through the US Congress. Other major industrialised states have not yet come forward with an indication that they are prepared to sign up to a comprehensive agreement. For example, the position of the Japanese Government, which was revealed only a week or so ago, is extremely disappointing; and other Governments still have a long way to go.
	The role of the European Union in getting a global climate change agreement is extremely important: first, because the EU has to agree to its own domestic policies on climate change in order to show that it is serious about tackling emissions; and secondly, because the EU has a crucial role to play in developing a global agreement on providing finance for climate change mitigation and adaptation in developing countries. Those are the two essential characteristics of any EU position.
	If the EU does not agree ambitious climate change targets, other countries are less likely to follow our lead. Similarly, it is widely recognised that if we are to get developing countries to agree to a comprehensive agreement on climate change, they will expect financial compensation and assistance to allow them to adapt to climate change and mitigate its effects. They rightly say that they are not prepared to make commitments on emissions limits if countries such as our own, which have benefited from a period with no limits, are allowed to get away with not providing anything towards the costs of helping countries that have not previously enjoyed economic growth.
	Those are the essential building blocks of any international agreement on climate change. It is therefore essential that the EU agrees a clear and comprehensive position and takes it forward to the negotiations leading up to Copenhagen. Unfortunately, the signs are that so far there have been difficulties, to put it mildly, in getting a European agreement on the type and scale of finance that is required for climate change adaptation and mitigation in developing countries. For example, Finance Ministers were unable to reach agreement on a number of occasions and have effectively kicked the decision into touch for the Council of Ministers to discuss this weekend.
	There are now suggestions that an agreement will not be reached this weekend but will be left for the Swedish presidency to deal with at a later stage. It is widely recognised, of course, that for all sorts of reasons the Czech presidency was unable to take forward the negotiations necessary to reach an agreement on a European position. I strongly urge the Government not to allow this weekend's discussions to finish without an agreement on finance for developing countries for adaptation to, and mitigation of, climate change. It would not be right to leave the matter to negotiations in the next few months under the Swedish presidency, as that would send a bad signal to the rest of the world about the EU's willingness and ability to enter into a widespread and comprehensive agreement on climate change later this year.

Mark Lazarowicz: I agree that there is a real risk of that situation developing. That is why it is essential that we get an agreement this weekend, and I hope that the British Government will make that one of the themes of the discussions. I hope that the summit will not be allowed to conclude until an agreement has been reached, even if it means going through from Thursday to Sunday or Monday next week. The summit will not be regarded as a success in the run-up to the climate change negotiations if anything other than the most minor details of an agreement are left to future discussions and meetings. It is essential that that point be made in the run-up to the Council.
	I wish to refer briefly to two other matters of European policy on climate change that came up earlier in the debate. The first is the common fisheries policy. We have heard repeated in today's debate—by some of those who, although they do not like being called Eurosceptics, tend to fall into that category—the view that the policy is basically a bad thing because it prevents member states from fishing as much as they want to. When it comes to climate change, however, there is evidence that over-fishing is one factor that leads to acidification of the ocean. There have been announcements and scientific findings about that in the past couple of weeks. We must recognise that we have to control fishing and prevent over-fishing. That is one of the many factors that have to be addressed if we are to deal with climate change.
	Another issue that was mentioned earlier was the economic rescue and recovery programme. I welcome what is being done at European level on that, too. One disappointment for me in considering the recovery programme so far has been that the elements of what are generally described as green jobs or green employment have not been as strong as they ought to be. I hope that in the European summit that is coming up the UK Government will strongly emphasise that a high proportion of the funding set aside for the European recovery programme must be devoted to economic activity and employment-creation schemes that recognise the importance of renewable energy and renewable technology, not just in creating employment but in meeting a wider climate change agenda.
	I turn briefly to another matter that has been mentioned in the debate and is of concern to me and, I know, to many colleagues: policy on the middle east and the EU's policy towards Israel and Palestine. I welcome, as I suspect do most colleagues, the support and the high profile given by the Obama Administration to getting some type of settlement agreement between the Israelis and the Palestinians. The Administration's approach to the dispute seems to underline clearly the fact that only by putting pressure on the Israeli Government can we get a real change in their position. It is surely no accident that Prime Minister Netanyahu's statement that he would be prepared to accept a two-state solution, even if in a very qualified way, came after the clear message from the United States Administration that they would not be prepared to accept anything less from the Israeli Government.
	Similarly, the EU must take a strong position towards the current Israeli Government. There should certainly be no question of any upgrade in Israel's current relationships with the EU until there is genuine movement towards a settlement in the middle east that is acceptable to both Israel and the Palestinians.
	The final subject that I should like to deal with briefly is one that my right hon. Friend the Foreign Secretary dealt with towards the end of his opening speech: the question of how those of us who are enthusiastic about the EU and about greater co-operation between the nations of Europe can get our argument over. We have patently not been very successful at doing that, certainly in the recent elections and perhaps over a longer period.
	It seems to me that the most important and significant thing that those of us who support the EU and greater European co-operation can do is ensure that it results in not just positive words but positive actions. We can refer to what has been achieved and what we have gained from European Union membership for our own country over many years. The economic advantages of membership of a trading bloc are clear, and we can point to the fact that for the 53 years of the EU we have seen peace between all the member states. One of the objectives of the EU was to prevent European wars from happening again. Whereas in the previous 53 years not only two but six major conflicts in Europe affected states that are now members of the European Union, in the past 53 years there has been no military conflict between members of the European Union. That was a major reason for its establishment; it is certainly one of its major achievements.
	However, we must speak not only about the past but about the deeds that can now be undertaken to create greater support for Europe, the European Union and closer and greater European co-operation. Three things need to be done. First, we must end the institutional argument—that is why I welcome the recognition on the Government and Opposition Benches that, if the Irish agree the Lisbon treaty, it will end the institutional argument for some time to come.

Mark Lazarowicz: It surprises my hon. Friend as much as it surprises me.
	Secondly, we need to tackle reform of the European Union institutions. We have had problems, to put it mildly, about the way in which we have operated as Members of Parliament and about our expenses and allowances. We all recognise that there are also problems at European level, which cannot be left untouched for much longer.
	Above all, our Governments must ensure that the European Union devises solutions and programmes for the important issues of the day. I have mentioned climate change, the middle east, economic recovery, international development and global security. If the European Union can get back on track, tackle such issues and get results, we will witness a major change in the British public's opinion of it.
	The current British Government have the opportunity to bring about those genuine policy changes and advances at European level. A Government and a party that have links with political parties throughout the European Union have a much greater chance of securing benefits for this country and genuine change and progressive policies in Europe than the Conservative party, which is apparently choosing a road of isolation in Europe through its decision about whom it wants as friends and whom it wants as enemies in European Union matters.

William Cash: That is why I passed a note to my right hon. Friend the Member for Richmond, Yorks (Mr. Hague)—because I want to get to the bottom of the matter—and, indeed, why I made my response to my right hon. and learned Friend the Member for Rushcliffe. I have great faith in my party doing the right thing, for the right reason and at the right time, but I shall have to wait and see.
	That is part of the problem, so I will continue to pursue my objective in that respect, just as I will continue to pursue my objective of returning the supremacy of this Parliament to this Parliament, because it is not our Parliament; it is their Parliament—it belongs to the people. That is why they deserve a referendum and why they deserve a Parliament that functions effectively. That is also why I say that this Parliament is a sham—because the two conditions that I have described are not operating. We do not have the supremacy of Parliament, nor do we have a referendum, so—it has to be said—this Parliament is a sham.
	In 1993, I wrote a piece entitled "A Brave New Europe", which was a chapter in a book, in which I referred to the fact that
	"No treaty, no piece of paper, will alter"
	the fact that history repeats itself. I said that, at worst, we could return to racism and fascism. In  The Times last week, I pointed out that I had made those remarks in 1993 about the rise of the far right. I also said then that the traditional conservatism in Europe was a
	"dangerous 'Conservatism' known to the authoritarian, even racist, tradition".
	Look at the rise of the far right in Austria and Hungary, Mr. Deputy Speaker. Look at it—it is happening on the back of unemployment, immigration and the failure of the European Union. When the hon. Member for Edinburgh, North and Leith talks about all the achievements, I ask the question: what are these achievements, given the mess that we have got into with enlargement in the Balkans, which I mentioned earlier and which I have been concerned about in debates in the European Standing Committee?
	In 1993, I talked about immigration coming from the east. I spoke about the fact that we were facing
	"the prospect of enlargement to"—
	in those days—"up to 20 countries," and about the difficulties of not bringing those countries into a democratic environment. Indeed, what we have brought them into is an undemocratic environment. That is part of the problem. I asked what would happen if they were to be flooded with new immigrants. That is part of the difficulty with the way in which the European Union functions these days.
	Finally, arguing for an association of nation states—a position that I have maintained ever since—I said that I had written a paper in 1991, at the invitation of the then Foreign Secretary, Douglas Hurd, when I was chairman of the Conservative Back-Bench European affairs committee, having been chosen by a substantial majority of Conservative party MPs in a secret ballot. I was asked to write the paper for the Conservative manifesto committee and warned, as I wrote in "A Brave New Europe", that the direction in which we were going
	"would leave us on the outer hub of a two-speed Europe which would undermine the United Kingdom and the European Community itself. I was staggered when even the words 'independent sovereign state' were removed from the final draft. The lines for the battle of Maastricht were drawn—and it is by no means over.
	What is being created is a craven, defeatist, self-destructing European Community riddled and corrupted by a fear of freedom—a  Brave New Europe indeed.
	The forces within this Europe—the artificially created Europe engineered at Maastricht—will darken and destabilise Europe as a whole. The real Europeans must continue the battle from within."
	That is exactly what has happened. Indeed, I would go further. The most recent opinion polls show that 88 per cent. want a referendum, while 72 per cent. of the British people believe that we should break the rules of the European Union if it is in our national interest to do so and 68 per cent. do not want the euro. In answer to the question, "Does Europe listen to you?" 71 per cent. said no. That is the reality that we are faced with on a whole raft of matters, including the bullying of the Irish people.

William Cash: That may well be the case in the country at large, but it is certainly not the case in this Parliament, as far as the Whips are concerned. That is part of the reason why we are living in a parliamentary sham; that is part of the problem.
	On the question of UKIP, the deputy leader of that party stood against me at the last general election, and he lost his deposit. There is a lesson to be learned there: if we put forward policies that are genuinely in the interests of our electorate and they know what those policies are, they will vote for us. That is exactly what has happened: my majority has tripled since 1997. I am simply making the point, in common with several of my Conservative colleagues, that people will vote for those of us who have consistently pursued a policy of looking after our constituents and the country by arguing the case, not for a completely absurd, negative view of Europe but for trying to make Europe work properly. That is the whole point.
	In order to make Europe work properly, we have to have an association of nation states. If hon. Members read the speeches of Václav Klaus of the Czech Republic, they will see that he speaks exactly the same language. I have done many conferences with him, and we talk the same language for the same reasons. We want a Europe that works; we do not want a European Government. As my right hon. Friend the Member for Witney (Mr. Cameron) said the other day, we want trade and co-operation. I must have said that a thousand times. We also want British laws for British judges. That was my comment, which I made to the Prime Minister on 10 November last year, and which was picked up by UKIP.
	If we had a policy that genuinely argued for the kind of Europe that we ought to have, I know that we would win the next general election by a landslide. We would see the end of the BNP argument on the Europe front. I have already argued against racism—I was arguing against it back in 1993—but the plain fact is that people have not been listening. We have argued our case, and I have put myself on the line over this matter. My constituents—in Stafford up to 1997, and subsequently in Stone—have backed me all the time, and so has my local association, although I can tell the House that there have been attempts periodically to destabilise my position. During the critical time of the debates on Maastricht, Mr. Ted Bowers got up at the end of my speech to the annual general meeting and said, "Mr. Cash, remember the words of Churchill: your first duty is to your country; your second duty is to your constituents; in the third instance, your duty is to your party's policy and programme." Anyone who adheres to that is doing the right thing for their constituents and for their party, because, as Disraeli said, the Conservative party is a national party or it is nothing. He did not mean nationalistic; he meant national. We must have a programme involving an association of nation states that can and does work, and that is what people want.
	When we look at the comparisons between ourselves and the eurozone, we see that, time and again, we have done better: on inflation, on employment and on a whole raft of measures. As we move towards the summit that is coming up in a few days, the bottom line is that it is time for the Government to stand up for this country and to stand against the ridiculous sell-out on City regulatory matters. They must stand up for this country, because if they do not, this place will remain a sham. We need to stand up for our parliamentary democracy, because it is the electorate's democracy, not ours.

Austin Mitchell: I am not defending the BNP; I am trying to explain the nature of the vote. What will happen when people come to us and ask why the Government cannot do more to help industry and all we can reply is, "Aid to industry cannot be allowed in Europe," or if the Government's reaction to proposals for retrospective business rate payments in the docks, which will cause closures and unemployment, is that they cannot stop them because aid to industry will be struck down in Europe? What about when people say they want something done about immigration or labour conditions or that they want British jobs for British workers at the oil refineries on south Humberside and all we can reply is, "Sorry, we cannot help you; Europe stops us from doing anything"? That speaks of the kind of futility and discontent that leads to an increase in the BNP vote.
	We all know the old joke about how many MPs it takes to change a light bulb. Nowadays, the answer is not 646, but 785—the number of MEPs required to change a lightbulb, because it is something that we in this Parliament seem unable to do. That cannot be good for democracy, and it is certainly true that the EU is not good for the economy. We are now moving towards cuts, stringency and austerity—a period in which there will be an onslaught on Government spending probably from both main parties, although it will, of course, be more massive from the Conservative side.
	Let us look at the burdens imposed on us by Europe, which have increased for two reasons: the first is our former Prime Minister's agreement to give up a substantial chunk of the rebate in order to bring about reforms in the common agricultural policy, which everybody knows we will not get and we cannot get in any case until 2013; and, secondly, payments to Europe are increasing because of devaluation. Those payments have to be made in euros across the exchanges, so every time the pound goes down, the payments increase.
	Our net contribution, excluding the £2 billion or so we contribute to projects such as Galileo, which is about providing a satellite guidance system that people have to pay for, unlike the American one that we get for free, is now about £6 billion a year. That is spent across the exchanges, and it increases to £7 billion and a bit because of devaluation, while the £2 billion increases to £2 billion and a bit, so we are ultimately talking about £9 billion and a bigger bit before we have even started. That contribution does not include the costs of the common agricultural policy, which the OECD calculates as having a real resource cost of £15 billion for our economy, or the common fisheries policy, which was much praised by my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz), but which costs about £3 billion a year in fish that are not caught by British vessels but are taken to Europe and sold there, without any contribution to processing jobs in Britain. Then there is the cost of regulations, which is calculated at about £28 billion.
	Finally, there is the cost in lost growth because Europe drives with the brakes on the economy. The non-European world economies grew over the last 10 years, before the recession, at 3.8 per cent. a year, while Europe's economy, including ours, grew at 2.6 per cent. a year. Why? Europe believes in deflationary economic management, which means that we lose about 0.5 per cent. of our gross domestic product annually. That is a cumulative process, so we are losing about £7 billion a year in growth that we would have had if we had not been forced to make these contributions and join this club.
	That is damaging the British economy. We are carrying a considerable burden—the second greatest in Europe—and we cannot afford to carry it at a time when the Government are going to launch themselves into cuts in budgets of all kinds. Why should we make such a massive contribution to Europe and across the exchanges at such a time?
	Last night, in the Public Accounts Committee, we agreed a report on financial management of the European Union. That might be considered quite a comic issue, and the report is pretty hostile and critical. I do not want to quote from it because it has not been published yet, but I must point out that for 14 successive years the European Court of Auditors has refused to agree to the European accounts. There is enormous scope for fraud and fiddles in the two biggest funds, the cohesion and common agricultural policy funds. Between them, they hand out 80 per cent. of Europe's expenditure. Eleven per cent. of spending on the cohesion funds is irregular, while between 2 and 5 per cent. of spending on the common fisheries policy is irregular. That leads to massive deficits.
	According to a fascinating book by Marta Andreasen, a former auditor to Europe, in 2003
	"the Court of Auditors had estimated that 50 per cent. of suckling cows which were claimed to be grazing in Portugal did not exist. Eighty-nine per cent. of farms in Luxembourg had submitted claims for payments"—
	area payments—based on an inaccurate assessment of the area of those farms which, if correct, would have doubled the size of Luxembourg. We are told that
	"In Greece, one enterprising farmer...claimed"—
	and he was paid—
	"to have lost 501 sheep to wolves between 2000 and 2004".
	That is the way in which the money—our money—is being wasted, and the European control system appears to be incapable of doing anything about it. The book from which I have quoted, which I hope Ministers, including Treasury Ministers, will read, shows that the funds are controlled by énarques—brilliantly educated French civil servants whose role is to oppose all reform, all change and all adequate systems of auditing, because they would expose the embarrassments and corruption that go on. That is the benefit that we obtain from Europe.
	My mother once told me that at the first election meeting that she ever attended, which was in Halifax just after the first world war, the Conservative candidate was obviously to a degree simple-minded. His mother spoke for him: his mother was a lady. She asked the electorate to be "to his virtues very kind, to his faults a little blind". That is our position on Europe in the Labour party, apart from the fact that we are not a little blind but totally blind to its faults.
	I consider it tragic that some of the finest minds in the country, including Foreign Ministers in the Labour Government, are involved in the development of second-rate excuses for third-rate policies imposed on us from Europe. A classic example was given earlier in connection with the referendum. Such tortuous reasoning is devoted to explaining that a constitution on which there could have been a referendum, because it involves a basic change in our democracy, is very different from a treaty which is not important although it contains exactly the same provisions, and that while it is possible to vote on one, there is no need to vote on the other. That kind of tautology cuts no ice with the British people. They regard us as fools for even listening to it. They want a referendum, but we are having to listen to a tortuous, Jesuitical explanation saying that they cannot have a referendum, because this is a treaty and not a constitution. I think that that is partly, indeed largely, responsible for the degree of alienation that we are facing. We are trying to sell a culture of lies to the people.
	The classic argument about the referendum relates to what is happening in Ireland. The Irish did reject it, and we are now involved in shipping container-loads of blarney over to Ireland to persuade them to vote in favour of something that they have already rejected. As has been pointed out, there have been concessions, but if they are not in the treaty they are not valid and cannot be sustained, and if they are in the treaty we will have to re-pass it in this place. I am afraid that all of this might well work, however. The Irish have been scared into thinking that if they vote no this time they will be on their own and out of Europe, and that they will therefore not get all their agricultural subsidies, which will produce terror.
	I remember my first visit to Brussels. It was in the early '80s, and I was with a party of Irish MPs. One of them was a member of Fianna Fail. We were in the back of a bus, and he had had a bit to drink—although not much—and he was enthusiastically singing the following campaign song for us all the way around Brussels: "Arise and follow Charlie." That was a reference to Charlie Haughey, and his rendition of the song was stirring. This time the electorate in Ireland need a slightly different theme song, however: "Arise and follow Tony." In other words, if the Irish vote for the constitution, they will get Tony Blair as President. That would be a big inducement to them to turn out in their thousands or millions to vote for the constitution. I am afraid that our hope that we might get a vote in this country because the Irish have rejected the treaty will probably be vitiated, therefore, but that is just me being gloomy in my assessment.
	I want to conclude not by being gloomy, however, but by saying that what we need in this European debate is neither the vacuous enthusiasm of the Liberal Democrats—and, indeed, of those on the Labour Front Bench—nor the negativity of UKIP, but just a degree of realism. Why cannot the Treasury do a cost-benefit analysis of the gains and losses of being outside Europe? Why do we not have that to put to the British people so that they know all about what is involved—what they are paying for, and what they are getting? We should provide that information, instead of debating abstractions such as "Europe is wonderful for the environment" or "Europe is good for fish"—a manifest untruth that will cut no ice in Iceland. We should not indulge in such mythology and enthuse about a Europe that does not exist. We would get sensible decisions from people if we gave them sensible information, and if we ourselves had sensible information. It is the responsibility of Government to tell us what we really get from Europe, and the responsibility of the Treasury to do an accurate and full study of the costs and benefits of Europe. On that basis, we could take rational decisions, which is not the basis on which we can take them now.

Ian Davidson: I seek to propose a question. The hon. Gentleman said that he is in full support of his Front-Bench team and a referendum on the European constitution/treaty. Can he clarify what the position of his Front-Bench team is on what they will do if the Conservatives win the election and the Irish and the rest of the European Union have already ratified the treaty? Will the Conservatives still be committed to a referendum, or can the Tories not be trusted in Europe?

Tobias Ellwood: The hon. Gentleman posed the same question to my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) at the beginning of this debate and he will get exactly the same answer now. The sooner we have a general election in this country, the sooner we can have that referendum too.

Tobias Ellwood: The hon. Lady just glosses over the fact that the Irish are being given a second chance, as if they should somehow appreciate that. We have not even had a first chance. Why not give it to us? Let us have a general election, and then we will have the opportunity. I promise the hon. Lady that it will be in our manifesto, and it will be done very quickly.
	Let us remind ourselves what would happen if the Lisbon treaty were fully ratified by this country. We would be signing up to an EU President, an EU Foreign Minister and a single legal personality for the EU, under a self-amending treaty, with national vetoes to be abolished in 60 key areas. It was interesting listening to the Chairman of the Foreign Affairs Committee—who disrespectfully scuttled out of the Chamber 10 seconds after he had finished his speech. He talked about the European Union as a volunteer club, and many hon. Members would agree that that is exactly what it should be. We are volunteers in the club, and we have some general interests on which we come together, but there are ways in which we differ greatly from each other. Like the hon. Lady, I grew up in Europe—[Hon. Members: "We all did."] I meant that I grew up in various different places across Europe, rather than in one place, but I am grateful for the correction. The important point is that there are some wonderful differences as well as the things that bring us together.
	The European Union is forcing us together and labelling us all the same. We are not all the same; we have some interesting differences—we manage our economies in different ways, for one—and those are what we hope to defend. "One size fits all" simply does not work. The consequence has already been seen when the EU tried to speak with a single voice about what should be done about the threat from Saddam Hussein. There was no unilateral agreement. The same happened with Bosnia. I served in Bosnia in the lead-up to the Dayton peace accord. That was an EU responsibility, and if I remember correctly, it was Lord Owen who walked away from the table. He was the EU representative, but he could not make progress. It had to be done by the Americans, and it was not until Richard Holbrooke came in that we could sign the accord and get things moving.
	Europe should be less like line dancing and more like rock and roll. We all want to dance to the same tune, but we do not want to dance all lined up with arms linked; we want to do our individual thing in the same room, enjoying ourselves as neighbours. Labour Members claim that the Conservatives want to run away from the European Union, but that is wrong. We want to change the European Union to make it work for the benefit of Europe. It was designed to provide a platform for free trade. It was also designed, as the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) said, to prevent conflict, but it has now gone beyond that and is taking powers away from sovereign nations to run Europe as a whole. That is where we say enough is enough, and that is why we say that powers should be handed back.
	We had an opportunity to vote on this issue in March 2008, and I am proud to say that I voted against the Lisbon treaty and in favour of a referendum. Sadly, we will not get one from this Government, and they are running away from what the nation wants.
	It was interesting to hear the comments of the Liberal Democrat spokesman. Rather than trying to justify why his party scored an abysmal 13 per cent. in the recent elections, he chose to attack the Conservatives. He did not even touch on what Labour had to say. That reflects the writing on the wall about where things are going with the movement of power in this country.
	I believe that a voluntary club is the idea on which we need to focus, and that that is what a Conservative Government would bring about. At the moment 27 countries containing 490 million people are in the EU. As has been mentioned, Croatia, Turkey and Macedonia, along with other countries, want to join. Indeed, 10 years down the road we are very likely to see other countries, such as Albania, Bosnia and—moving forward—Ukraine and Turkey, becoming members. Will it be possible to get all those people round the table to agree some of the key policy issues on international foreign policy? No, it will not.
	The worry is that that will lead to stagnation. Decisions will not be made, and we will end up trying to run Europe as a whole. That will mean that we will lose the individuality that is so critical in allowing countries to flourish as they have, while being united closely enough to avoid the wars that were the original reason why the Union was put together in the first place.
	Much comment has also been made on what will happens with the European People's party. People need to understand how the European groups operate in order to comprehend fully why many parties sign up to them. They get funding: that is the bottom line. They get large sums of money. If a party breaks away from those groups—from the EPP, the party of European Socialists, or the Alliance of Liberals and Democrats for Europe—it loses an awful lot of funding. That is one reason why many other parties are not thinking of jumping ship right now, or are cautious about it. They want to ensure that the Conservatives are forming a group that will move forward. We are proving that that is the case.
	I am sure that announcements will be made in the not too distant future about how we will set up a group that will say, "We want the European Union to work, but we do not want to cede powers substantially. We want to honour the nations individually, too."

Tobias Ellwood: The hon. Gentleman repeated all the jokes that we heard from the Foreign Secretary, and they were not funny the first time. He needs to wait and see the group's full complement. He will see how powerful it will become and how much of a stronger voice it will be in the EU.
	I am running out of time, but I want to reiterate the point that I made in an intervention on the Foreign Secretary to do with the problems of the relationship between NATO and the EU. As I have mentioned, I visited NATO recently, and I was astonished to learn that there is no formal agreement whatever. The two operations in Brussels do not talk to each other formally, because in NATO Turkey refuses to talk to the EU, and in the EU Cyprus refuses to talk to NATO. We cannot have such powerful organisations using such large sums and dealing with matters as serious as security not only in Europe but in the middle east and beyond, if those organisations cannot operate sensibly. As a consequence, the responsibilities of the two organisations are starting to overlap. Mission creep is taking place. Security, humanitarian aid and so on are all things that NATO does extremely well already, but the EU is now doing exactly the same sort of thing. There needs to be better co-operation, so that they decide who is doing what. At the moment, that is not the case.
	NATO has huge experience in peacekeeping and stabilisation operations, monitoring EU elections and so on. Why are we deciding to repeat all that, using very much the same people but in a different guise under the EU? Let us understand what the EU can do; it can do certain things well—but Bosnia is one example of where it did not work, and Iraq is another.
	We need to recognise that there are limits to what large international institutions can achieve. The Galileo project has been mentioned, and what an astonishing waste of money that is. It merely replicates something that already exists, and I do not understand why we do not hear more objections from Labour Members. When it was put to a vote not long ago, they were whipped into approving huge sums of money for a system that will probably never fly. There is one satellite up there now, but there are supposed to be 24. The system is about five years out of date, and it is simply not going to work.
	I have been dismayed by what I have heard today. The elections gave us in Parliament an excellent opportunity to listen to the electorate and understand what people want. It is clear that people want to put a halt to wandering any further into the relationship with the EU. They want to make the EU work, but only up to a certain point, and that is exactly where the Conservative party wishes to place itself. I remind the House of the EU's original objectives. If we were to review them now, and understand what we can do with the EU, we would march forward to a better tune and in a better direction than the one that we are going in now.

Andrew Turner: My first point is about the European common fisheries policy, which has completely failed. Only last month, the EU Commission was forced to admit that its quota fishing system had failed. The position paper stated that 88 per cent. of European fishing stocks are overfished and 30 per cent. of managed fisheries are now outside "safe biological limits". The single market is encouraging greed in the fishing industry at the cost of ecosystems and the national fish stocks that they support. Enough is enough. The best place to make a safe and sustainable fishing policy for Britain is here in this House. Is it not time to renounce the European common fisheries policy—before the British marine ecosystem is damaged for ever?
	My second point is that, although the single market has some clear advantages, such as the removal of trade barriers, there are elements that still harm rather than help our country. First, there is the open-door policy for labour to move back and forth across our borders. That may help to fill vacancies for unskilled labour and the like, but it may be damaging to the future of certain professions in this country. I am sure that Members from throughout the country will have heard stories, from their constituents or in the media, of EU workers undercutting their British counterparts. I welcome healthy competition in the market, but prolonged and widespread cost undercutting in plumbing and joinery, for instance, damages our economy. It forces many British tradesmen to retrain or leave their professions entirely. Some people simply have nowhere else to go and join the unemployed. As we have seen, since the expansion of the EU, labour has almost always been in a state of flux. Once British tradesmen have been forced out of the market through undercutting, British expertise will be lost. If the migrant workers decide to return to their home countries, who will be left to carry out the work?

Mark Francois: It is a pleasure to wind up this debate on behalf of Her Majesty's Opposition. I am particularly pleased to be following my hon. Friend the Member for Isle of Wight (Mr. Turner); we are delighted to see him back in his place, speaking so eloquently on behalf of his constituents.
	I take this opportunity to welcome the hon. Member for Rhondda (Chris Bryant) to his new responsibilities. He will now serve the Government as an Under-Secretary of State at the Foreign and Commonwealth Office and will have the additional responsibility of being the Government's spokesman on European matters in the Commons, as their Minister for Europe now sits in another place. I first crossed swords with the hon. Member for Rhondda in 2004, during a Westminster Hall debate about Gibraltar. Shamefully, the Government were trying to sell out the people of the Rock in deal with the Spanish Government behind their backs. We won that argument and I hope to win other arguments against the hon. Gentleman in future.
	There have been some lively Back-Bench speeches in this debate; I shall not go through every one in turn, but I noted that the majority of speeches from the Labour Back Benches opposed, rather than supported, their Government's policy on Europe. There were a number of interventions, including on my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), from the right hon. Member for Rotherham (Mr. MacShane), who, unfortunately, is no longer in his place. Presumably, he is quietly consoling himself following his failure to get the job of Minister for Europe when it came up again. A number of us, himself included, wondered whether he would be recalled to the colours when an opportunity presented itself. The call, however, did not come. But we have news for him. He should not be too downhearted; given the very high turnover of Labour Ministers for Europe—there have been 11 since 1997—it is not inconceivable that, if he hangs on a little, he will get an opportunity to serve in that position again.
	During the last debate on Europe, we discussed the situation in Georgia. In the intervening time, unfortunately, the situation has not improved. It is now almost a year since the Russian invasion of Georgia, and Russia has still not abided by the terms of the ceasefire brokered by the French EU presidency. Specifically, Russian troops have not returned to where they were prior to the invasion. Russia has still not allowed Organisation for Security and Co-operation in Europe monitors into South Ossetia, and ethnic Georgians expelled from areas under Russian control have still not been allowed to return.
	Given that, it was wrong for the European Union, supported by the Government, to begin discussions with Russia on a new EU partnership agreement. It would be doubly wrong for the EU to agree the terms of a new partnership agreement with Russia while that country is in flagrant breach of the ceasefire agreement that the EU itself negotiated. I would be grateful if the Under-Secretary reassured the House this evening by saying that the Government will not allow the signature of any such agreement while Russia remains in breach of its ceasefire commitments.  [Interruption.] I know that the Under-Secretary is new to the Front Bench, but when his opposite number asks him a specific question for his winding-up speech, it is considered courteous for him to listen, not least because if he does he might be able to provide a reply for the benefit of the House.
	Having welcomed the hon. Gentleman to his new post, let me turn to Bosnia. In the last debate on Europe, we set out a number of the challenges faced by the international community there. Since then, unfortunately, there has been minimal progress; Bosnia and Herzegovina's dysfunctional central institutions are still racked by nationalist rhetoric. The Office of the High Representative is still under threat of closure, and the EU is still planning to remove its peacekeepers. Despite that period of drift, we have seen some signs of a renewed commitment to Bosnia in the new United States Administration, in particular from Vice-President Joe Biden. We hope that that leads to a greater recognition on the part of the US and the EU of the dangers that are still present in Bosnia, and we hope that both the US and the EU will act to address them.
	The European elections showed a rejection of socialist parties, policies and Governments across Europe, but in Britain the people's rejection of the Labour party was particularly decisive. The Labour party did worse than its socialist brethren in France or Spain. It got just over half the number of MEPs that the Italian socialists returned and a similar result compared with the German SPD, despite that party's having its worst election result since the second world war. In the new European Parliament, the British Labour delegation will rank as only the sixth largest party in the Socialist group, only just ahead of the Romanian socialists, who have 10 seats.
	The decisive rejection of socialism in Europe flies in the face of those in Britain who seek to use the financial crisis to justify a re-emergence of big government. Nor was the result in Britain simply a protest against a weak and unpopular Government, weak and unpopular though they undoubtedly are. In France and Germany, centre-right Governments managed to increase their votes, despite serving as incumbent Governments during a period of recession.

Chris Bryant: Yes, it has. I travelled on the Eurostar from Paris last week, and I know that there are British border controls wherever people can get on a Eurostar train.
	On climate financing, we need to press hard for a deal in Copenhagen in December to secure the 30 per cent. reduction in emissions by 2020 that I am sure the vast majority hon. Members want to see. Several hon. Members on both sides of the House raised this issue, and I hope that they will be reassured to know that we will be pushing the Swedish presidency to ensure that we move forward on it. There can be few in the European Union who would doubt that we are the most rigorous of all the EU countries on this issue.
	My hon. Friend the Member for Birmingham, Edgbaston raised the matter of the extra seat that we would get if the treaty of Lisbon were to be ratified by all member states. According to existing UK legislation, where that seat would go would be decided by the Electoral Commission, and we would obviously introduce any additional powers that it needed in that regard.
	The hon. Members for Spelthorne and for North Dorset spoke powerfully about the Council of Europe, and there is not much that I can add to their comments.
	However, we heard a great deal of nothing from the Conservatives about their policy on Europe. The most interesting thing of all was the charming image of the Billy-no-mates charabanc that has been touring Europe over the past couple of years. Billy got his knapsack on his back and a baseball cap on his head to protect himself from the sun. He abandoned all his influential friends who were running Germany, France and Italy. He did not bother to go on the grand tour of the big cities—oh no! He travelled not the highways but the byways to find new friends. He did not go to France, Germany or Italy. He let on board his faithful charabanc only the
	"fascists, outcasts and ne'er-do-wells".
	Those are not my words; they are the words of Struan Stevenson, a Scottish Conservative Member of the European Parliament.
	It is interesting that the Conservatives are not prepared to tell us which parties will be joining them on their joyful little day out. Will they include the Polish Law and Justice party? One of its members says that homosexuals should not be allowed to teach, while another says that the affirmation of homosexuality will lead to the downfall of civilisation. The right hon. Member for Richmond, Yorks and the hon. Member for Rayleigh are both sitting there smiling now, but I think that one of the reasons why they are happy to have that party alongside them is their own voting record on these matters. That applies especially to the hon. Member for Rayleigh, who has never in his life voted for a positive measure on homosexual equality in this country.
	There was another party that the Conservatives wanted to get on board: Alternativa Española, the new, far-right party in Spain— [ Interruption. ] The hon. Member for Rayleigh is now saying, "Oh no we didn't", but his friend, the MEP Daniel Hannan, was certainly spending a good deal of time trying to persuade people to vote for Alternativa Espanola in Spain, even though it has several of Franco's original party members signed up to it. It also signed up to the Vienna declaration. No wonder the right hon. and learned Member for Rushcliffe (Mr. Clarke) thinks that this outing by the right hon. Members for Witney (Mr. Cameron) and for Richmond, Yorks is nothing more than "head-banging".
	The other thing that I found a bit depressing was that we heard not Hague the wit, but Hague the vague this afternoon. Let us compare that with his great, statesmanlike pronouncement that
	"we would not let matters rest there".—[ Official Report, 12 November 2007; Vol. 467, c. 423.]
	On 29 April, he said:
	"We would not rule anything in or out".
	We have heard that again and again this afternoon, although he could not say it with a straight face. He was smiling all the way. His great pronouncements, full of insight and clarity, also include:
	"We will have among our major goals the return of social and employment legislation to national control".
	That sounds like the renegotiation of a treaty, despite the fact that the shadow—
	 Motion lapsed (Standing Order No. 9(3)).

Jonathan Djanogly: Let me make it plain that the reason why we oppose the Second Reading of this union-sponsored Bill, and the Government's haphazard attempt this afternoon to find a compromise, is that all those proposals, and the money resolution, will reduce access to employment opportunities at a time when the Government should be doing exactly the opposite—and, as I shall show, at a significant cost, not only to business but to the taxpayer.
	Since 1999 the weekly limit for statutory redundancy and unfair dismissal payments has been increased in line with the retail price index, rounded up to the nearest £10. In 1998 the sum was £220; in 2004 it went up to £270; in 2007 it was raised to £310; in 2008 it was increased to £330; and on 1 February this year it went up to £350. The limit has already increased by 6 per cent. this year, and earlier today we debated in Committee the Government's plans to increase the weekly limit immediately by more than 8 per cent. to £380, at a time when we are experiencing negative RPI inflation. The Government also wish to bring the increase forward by five months, even though we have already had an inflation-busting increase this year.
	Tonight we are debating the implications for the public finances of an increase from £350 to something in the region of, let us say, £470. Sadly, we seem to be entering some kind of tragic bidding war between the soft left on the one hand and the hard union left on the other. Redundancies are, of course, a last resort for employers, including for the largest employer—the state. Employers do not want to lose the investment they have made in their employees, and will try to retain their staff as long as possible. They will make people redundant only when they are forced to reduce their labour costs.
	The Minister will realise that increasing the weekly limit on statutory redundancy pay, especially to the extremely high level suggested by the hon. Member for Chorley (Mr. Hoyle)—or rather, by the unions—would make redundancies far more expensive for employers, including the state. Employers, including the state, will now have to implement more redundancies to reduce their labour costs by the same amount as before. If the Bill is passed, the cost to employers could mean a rise in unemployment, resulting in a significant additional cost to the Exchequer in terms of payment of unemployment benefits and lost tax revenues.
	The Department for Business, Innovation and Skills had its statutory instrument approved this afternoon. The impact assessment was based on an increase in the weekly limit on statutory redundancy pay from £350 to £380. The Government estimate that business would incur up to £121.2 million in extra costs. It is obvious that an increase from £350 to £470, as proposed by the Bill, would lead to significantly higher costs, and could have a devastating impact on many businesses across the country. Unemployment is increasing every week, and it is therefore likely that the cost to businesses would be greater than is suggested by any current estimates.
	What is recognised in the motion, however, is that the Exchequer, too, will be faced with enormous costs if the Bill is passed. Again, all we have to refer to is the impact assessment based on an increase from £350 to £380. In the assessment, the Government estimate that that will cost the Exchequer up to £53.9 million. We have seen what an increase of 8 per cent. will cost the taxpayer. An increase of around 34 per cent., from £350 to £470, would cost the taxpayer considerably more. I calculate the amount to be in the region of £210 million, which strikes me as a conservative figure. I should be grateful if the Minister could explain the cost implications of the motion for the state.
	Given the perilous position of the public finances, we know and the Minister knows—I think he more or less accepted it in his opening speech—that the country simply cannot afford this unnecessary measure. The Government—a Government on their last legs—are desperate to appease the trade unions that back them. That is what is so bizarre. I had thought that following this afternoon's concessions to the unions by the Government, the private Member's Bill would be withdrawn and there would be no need for the motion. That seems not to be the case, which shows just how feeble and unable to deliver the Government have become. They now need to focus on the reality of the situation, which is that they are imposing a large and unnecessary burden on both business and the taxpayer.
	Conservative Members cannot support an arrangement that makes businesses, or the taxpayer, subject to such large and unnecessary additional burdens, especially during the almost unprecedented recession in which we find ourselves. I hope that the Minister will sort out this mess before the Bill returns to the House.

Graham Stuart: I am grateful for this opportunity to plead for justice for the pensioners of the Armstrong group of companies, formerly Armstrong's of Beverley. I also pay tribute to my constituent, Sam Dunkerley, who has fought tirelessly for those, like him, who lost out when the Armstrong pension scheme collapsed. He is the spokesperson for the 110-strong Armstrong pensioners' society, which represents some 3,000 people who suffered a loss of income or future income when the Caparo group wound up the scheme in 2006.
	Caparo is a British-based company founded by the Labour peer Lord Paul. According to its website, it is a fast-growing global manufacturing group with a turnover of €1 billion. It has business interests in the manufacture of steel and automotive and general engineering products and employs 8,000 people worldwide. It has more than 60 sites in the UK, north America, India, Poland and Spain. This year's rich list in  The S unday Times named Lord Paul as the 88th richest man in Britain, with a personal fortune of about £500 million. He has been a Labour party member since the 1970s and was ennobled at Tony Blair's instigation in 1996. He funded the Prime Minister's leadership campaign in 2007 and urged him to call a general election in the autumn of that year, promising to donate "whatever he could afford" to the party's campaign fund.
	Caparo's empire is highly complex. It is a large conglomerate with many subsidiaries, all of which have supposedly separate financial interests. The ultimate holding company is incorporated in the British Virgin Islands. I will focus mainly on the activities of Caparo Automotive Ltd—CAL—and its subsidiaries Armstrong Fastenings, Willenhall Manufacturing and Armstrong Equipment. It was those plants that were covered by the Armstrong group scheme.
	In 1989, the Caparo Group acquired the assets and capital of Armstrong Engineering and secured them under a subsidiary named Caparo Automotive. Armstrong was cash-rich and the accompanying pension fund was more than 30 per cent. in surplus. For the next eight years, the Caparo Group made no contributions to the Armstrong pension fund. That pension holiday cost the fund £8 million. During the same period, the pension fund paid out £6 million for early retirement and redundancy programmes. As a result, the pension fund was reduced by a total of £14 million.
	In March 2000, the fund's liabilities exceeded its assets by £8 million. At about the same time, a triennial actuarial valuation was carried out, which recommended that the company inject some £2 million annually into the scheme over a five-year period to cover the shortfall. That was accepted by both the company's management and the trustees of the pension scheme. However, Caparo did not make the first instalment and, in April 2002, it announced the freezing of its final salary pension scheme. That followed its decision to close the scheme to new employees in 2000.
	Stakeholders who had yet to draw a pension from the scheme—some 1,200 people—would in future not receive an income based on their years of service and final salary; instead, it would be based on what was left in the fund after the entitlements of existing pensioners had been secured. The 1,800 pensioners who were already in receipt of their pension, such as Mr. Dunkerley, had their annual increase immediately stopped. Workers were notified of the change in a memo circulated by Caparo's chief executive, Lord Paul's son, Angad. He said:
	"As a result of the winding up, the pension benefits of current Automotive Group employees on retirement are likely to be significantly less than they may have expected."
	The decision was a hammer blow to the scheme's 3,000 members. Bryan Tipton, who worked as an assembly worker at Willenhall for more than 47 years, told the  This is London newspaper that after contributing to the scheme for 22 years he was expecting some £3,782 a year plus a tax-free lump sum. Instead, after the winding up of the scheme he could look forward to just £2,983 a year—£57 per week—and no lump sum.
	The winding-up decision was criticised heavily at the time. Ros Altmann, an independent pensions adviser who worked closely with No. 10 Downing street, said:
	"It seems unfair and unjust that a company as strong and as big as Caparo can wind up a pension scheme without being held accountable for its actions."

Angela Eagle: I am sorry that the hon. Member for Beverley and Holderness (Mr. Stuart) chose to make such partisan points; I do not think that they helped this debate. I congratulate him, though, on securing it and I am pleased to have the opportunity to discuss the important matters that it raises.
	The protection of pension scheme members' benefits is an important area of public policy for the Government, which is why we established both the Pension Protection Fund and the financial assistance scheme. Those bodies, along with the Pensions Regulator, are delivering better protection for scheme members. We will ensure that the regulatory framework remains appropriate and that the important compensation arrangements that we put in place work as effectively as possible.
	People who contribute to a company pension scheme can reasonably expect to receive their pension benefits. There can be few greater cruelties than to find that those benefits, and the retirement they were expected to fund, have been put in jeopardy because an employer has gone bust, in whatever circumstances. Through the Pensions Act 2004, the Government introduced a wide programme of new pension protection measures including the creation of the financial assistance scheme. That was a vital measure to support thousands of workers who would otherwise have lost out through no fault of their own. The scheme did not exist prior to 1997.
	The scheme provided assistance to those who lost significant amounts when their pension schemes started winding up between 1 January 1997 and 5 April 2005 as a result of the sponsoring employer becoming insolvent. We have since introduced new reforms to the financial assistance scheme. On 17 December 2007, the Government announced a package to deliver 90 per cent. of the expected pension to about 140,000 people subject to a cap of £26,000, the value of which will be protected. That proportion of assistance derived from post-1997 service and will be increased in line with inflation, which is subject to a 2.5 per cent. limit, and assistance will be paid from the scheme's normal retirement age subject to a lower age limit of 60. The Government have already implemented key changes to give priority to those elements that offered the most help to FAS members. For example, we have introduced an increase in assistance from 80 to 90 per cent. of a member's accrued pension, payable from the member's normal retirement age but subject to a lower age limit of 60 and an upper limit of 65. We have also enabled those who are unable to work due to ill health to apply for access to the scheme up to five years before their normal retirement age, subject to actuarial reduction.
	The hon. Member for Beverley and Holderness rightly went through the history of the Armstrong Group pension scheme. It began to wind up in April 2002, and so is eligible under the FAS. It has 2,984 members, made up of 1,096 deferred pensioners and 1,888 actual pensioners. The scheme's assets at 31 March 2005 were £55 million and its section 75 debt, which the hon. Gentleman mentioned, was £36 million. That is the additional amount required to secure full benefits through an insured buy-out. So far, 242 pensioner members of the Armstrong scheme have received £888,583.11 gross from the FAS—money that they would not have received without the reforms that the Government have put in place.
	The hon. Member for Beverley and Holderness raised a number of issues about the involvement of the Pensions Regulator with the Armstrong Group pension fund. He was interested specifically in the transparency of the regulator's decisions relating to the use of its anti-avoidance powers, and I shall address the matters that he raised.
	The Pensions Regulator was established under the Pensions Act 2004 as an independent risk-based regulator charged with protecting pension scheme members' benefits and the Pension Protection Fund. It started operations in April 2005. The 2004 Act broke new ground by giving the regulator statutory objectives—for example, to protect member benefits and the PPF—and Parliament gave it a range of new powers to address risks to members' benefits and the authority, as an independent regulator, to determine when it was appropriate to exercise them.
	The 2004 Act contained a number of new measures to address the avoidance that the hon. Gentleman has alleged took place. Avoidance is the risk that sponsor employers deliberately manipulate their affairs so as to shift their pension scheme deficits on to the PPF. That would put the PPF at risk, and have a cost consequence for responsible employers who were required to pay the risk-based levy.
	The two main anti-avoidance powers available to the regulator are contributions notices and financial support directions. Contributions notices allow the regulator to require a company or person involved in a deliberate act to avoid pension liabilities to put money into the scheme. Financial support directions enable the regulator to direct that associated or connected persons put in place arrangements to guarantee the pension liabilities of an employer that is insufficiently resourced to do so itself, or which is defined as a "service company".
	In light of the regulator's operational experience and developments in the pensions market, the Government made amendments to the regulator's anti-avoidance powers in the Pensions Act 2008 to deal with new risks that had emerged. The changes provide the regulator with an additional power to issue a contribution notice where an act or failure to act would have a materially detrimental effect on the likelihood of members' benefits being paid. The new provisions build on the regulator's original powers to issue a contribution notice, in which the regulator has to show that the main purpose of the act or failure to act was to avoid the debt to the pension scheme.
	The hon. Gentleman was critical of the Pensions Regulator, but I hope to reassure him that the decision was taken appropriately. In December 1989, the Caparo Group acquired Armstrong Equipment Ltd which, as he said, was a west midlands-based producer of wire thread, brass inserts and tooling systems. Two years later, Caparo went private, buying back the remainder of the company's listed shares.
	In March 2006, Caparo put Armstrong Equipment Ltd into receivership. The Armstrong pension scheme trustees asked the regulator to investigate following the buy-back of the employers' business by a connected Caparo company as part of the administration process. Following a thorough investigation, the regulator concluded that there were no reasonable grounds for use of its anti-avoidance powers—that is, for issuing either a contribution notice or a financial support direction. The regulator then communicated its decisions to the trustees.
	It is important to note that the regulator's decisions to use its powers turn on several important factors. As a result of both domestic and EU law, the regulator's status as a public authority places demanding standards on its decision making. In broad terms, a public authority would be acting unreasonably if it took account of factors that were not relevant, or failed to take account of relevant factors. The regulator's powers involve specific legal tests, and there are certain factors to which it should have regard. That can include the degree of involvement that the person had in an act, and the value of any benefits derived. In June 2007, the Department for Work and Pensions received correspondence from legal representatives acting for the trustees. It stated, in effect, that they were considering a judicial review of the regulator on the basis that its decisions not to intervene were flawed. That is essentially the case that the hon. Gentleman has made tonight.

Angela Eagle: Yes, that was the trustee's initial thought, but as I have said, the regulator was set up as an independent body, and that means that it is independent from Government. That independence ensures that its decisions in any particular case are not influenced by Ministers. It is not appropriate for Ministers to discuss the details of the regulator's investigation in a particular case, or specific details relating to the regulator's decisions. However, it is relevant to note that once the trustees had had further discussions with the regulator, they decided not to pursue the matter further. That is, they were satisfied that the regulator had properly considered whether to issue a contribution notice or financial support direction.  [Interruption.] They did not seek a judicial review; they decided not to do so after they met representatives from the Pensions Regulator.
	The hon. Gentleman made a number of points about the transparency of the regulator's decisions. The regulator, and anyone receiving information from it, is bound by restricted information provisions under the Pensions Act 2004. Broadly, they provide that the regulator cannot disclose information that it receives relating to the business or affairs of any person. That is done to ensure that commercial or personal information that is usually of a sensitive nature is appropriately protected, and that the provision of such information, on which regulator investigations rely, is not discouraged through fear of disclosure. Those who provide information to assist regulator investigations must be able to trust that their confidences will be respected. Much of the information that the regulator receives in the course of an investigation is restricted in such a way for those reasons. I understand that a good deal of information was shared by consent between the parties and the regulator, so that a full debate of the issues could take place. As the members are legally distinct from the trustee, however, the regulator was unable to share its information directly with them.

Angela Eagle: I am happy to meet them, but I have to say that the decision is a matter for the regulator. Parliament has ruled that Ministers cannot interfere in such decisions. In those circumstances, if the hon. Gentleman wishes to discuss such issues, I would have thought it more important that he meets the regulator than me, the Minister. Parliament has decided that I cannot have a direct effect on the decisions that an independent regulator takes, as the House put in place powers to make the regulatory process independent of Ministers. It would perhaps be more productive if the hon. Gentleman pursued his worries directly with the regulator.
	The trustees essentially represent members' interests and usually provide an interface with the regulator. I understand that the regulator has throughout encouraged the trustees to engage in dialogue with members to address their queries.
	The hon. Gentleman did not mention it, but I know that he has referred the case to the parliamentary ombudsman. Again, the matter is one for the independent parliamentary ombudsman to look at. I am aware that the regulator is co-operating with the ombudsman's investigation, and I look forward to the outcome of the investigation in due course.
	I have every sympathy for former employees of the Armstrong Group. To lose one's job and to be uncertain about the future of one's pension is distressing and causes great worry to many people. The Pensions Act that the House passed in 2004 was designed to tackle these problems, with a more powerful, proactive Pensions Regulator and real help for members of pension schemes through the financial assistance scheme and the Pension Protection Fund, which did not exist before the legislation was passed. This cannot put everything right when pension schemes are wound up, but it ensures far greater levels of protection than ever existed when the previous Government were in power. I make that point as the hon. Gentleman has chosen—
	 House adjourned without Question put (Standing Order No. 9(7)).